Standard & Poor’s downgraded the credit ratings of France, Italy and seven other European countries on Friday, a move that may have more symbolic than fundamental financial impact but served as a reminder that Europe’s economic woes were far from over.
Another memory jog came Friday from Greece, the original source of Europe’s debt troubles. Talks hit a snag between the new Greek government and the banks and other private investors that Athens hopes will agree to take losses on their debt so that Greece can avoid a default.
Together, those developments underscore that even as Europe’s debt turmoil enters its third year, no clear solutions are yet in sight ”” despite recent signs that a new lending program by the European Central Bank might be easing financial market pressures.
Standard & Poor’s track record is miserable and caters to the Wall Street banks’ avarice in bleeding countries for higher interest rates. These higher rates have the effect of a self-fulfilling prophecy, making it extremely difficult, if not impossible, for a debtor to pay off its [url=http://britainloans.co.uk/cash-loans.html][b]cash loans[/b][/url], thereby ensuring a “default.” S&P, along with the other rating agencies, should be regulated by the international community. In any case, no stability to the European debt crisis will come unless the ECB sucks it in and actually buys the debt from the affected countries, in effect printing money as the Fed did (and it worked). The European countries could learn something from our Fed, just as our people could use the European example of foolish austerity to learn about what not to do in an economic downturn. I don’t think anyone is rushing to buy Euro denominated bonds right now, S&P is quite late to the table.