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Germany joins attack on ratings agencies

Let's set up rivals, urges German foreign minister as he offers an olive branch to London

Ben Chu
Monday 19 December 2011 20:00 EST
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The German foreign minister, Guido Westerwelle, launched a renewed drive yesterday to break the stranglehold of the US credit rating agencies on the global finance system.

"It's high time we found an independent European rating agency," he told journalists in a meeting in London, indicating he was strongly dissatisfied with the recent performance of US firms Standard & Poor's and Moody's.

On 5 December, Standard & Poor's said it was putting almost all the eurozone countries on "credit watch".

The six eurozone countries with an AAA rating – Germany, France, Finland, the Netherlands, Austria and Luxembourg – now face a 50 per cent chance of losing that coveted status within the next two months.

France is expected to be stripped of its AAA rating by S&P within days. Last week, Moody's also said it intends to review all EU states in the first three months of 2012 and criticised the "continued absence of decisive policy measures" to solve the eurozone crisis.

Mr Westerwelle, who was in London to offer the UK an olive branch after the 9 December summit left Britain isolated in the EU, also stressed European governments have no plans to undermine the UK's financial services industry.

"We have no intention to weaken the City," he said when asked about David Cameron's failed attempt in Brussels to secure special protection for the Square Mile from EU regulation.

He said he hoped to bring Britain back into the EU fold and the UK's "observer status", while the rest of Europe pushes ahead with a new "fiscal compact", could be the prelude to closer alignment.

Mr Westerwelle also suggested the British and German governments agree on the broad solution to the debt crisis.

"We can't solve a debt crisis by making it easier to take on new debts," he said.

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