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5th Mar 2024

EU commission: 'We know better than ratings agencies'

  • The EU commission building in Brussels. Some information is too sensitive to share, Bailly said (Photo: tpholland)

The European Commission has claimed it has secret information about the positive state of EU countries' finances, following a shock downgrade of core member states.

Commission spokesman Olivier Bailly made the statement at a regular press briefing in Brussels on Monday (16 January), two days after US-based agency Standard & Poor's (S&P) downgraded nine EU countries, including France.

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"We have more information than the ratings agencies and we think there are elements missing in their analysis ... We have monthly updates from member states. We share this information on a confidential basis. The ratings agencies do not have this information," he said.

When challenged on why Brussels does not make the good news public, he answered it would take too much time.

"We cannot publish every day all the information we have, otherwise we would be commenting on this information and on market reactions every day and I'm sure we have more important things to do. Beyond the daily comments we need to see the [bigger] perspective and this is what we are here for."

Bailly noted the S&P decision was "very odd as far as timing is concerned ... indeed [it was] a strange timing."

Economic affairs commissioner Olli Rehn recently told Finnish TV that some speculators have cashed in on euro instability. But Bailly explained that he was referring to better-than-expected bond auctions in Italy and Spain rather than some kind of market conspiracy theory.

Whether or not his comments reassure investors remains to be seen. But rival ratings agency Moody's on Monday went against S&P and kept its triple-A rating on France unchanged.

One of S&P's main reasons for the downgrade is that EU austerity plans risk becoming "self-defeating" by stopping consumers from spending and preventing economic recovery.

Bailly said EU countries do not have enough money to launch fiscal stimulus programmes and that growth will have to come from "structural reforms" - like creating a new EU digital market - a few years down the line.

But for his part, EU Council chief Herman Van Rompuy also on Monday lent weight to S&P's warning.

He said in a written statement after meeting Italian leader Mario Monti that: "We should re-focus on growth and job creation. Growth-friendly consolidation and job-friendly growth are what we need!"

Van Rompuy noted the EU has held 13 summits on the crisis in the past two years.

He predicted that EU leaders will at the 14th one on 30 January agree a treaty on fiscal discipline and sign it in March.

He added that the EU's new bail-out fund, the ESM, will be up and running in July rather than 2013 as originally planned.

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