Juncker on Standard and Poor's credit watch

(CS) Prime Minister Jean-Claude Juncker lashed out against credit rating agency Standard and Poor's, saying he was not worried but rather surprised by the agency's credit watch announcement.

In an interview with German radio station Deutschlandfunk, Juncker had few good words for the rating agency after Standard & Poor's announced it was putting 15 eurozone countries on credit watch, including Triple-A rated Luxembourg, Germany, the Netherlands, Austria, Finland, and France.

Taking the example of Luxembourg, he questioned why a country with a 20% debt level was in danger of being downgraded. “If all countries on this planet had 20% public debt, we'd all be better off,” he said.

Do not take ratings too seriously

“We are on our way to mastering the debt crisis. We are consolidating, we are reforming, we are also reforming the way in which we govern,” Juncker said of the efforts being made within the eurozone to meet the crisis, and his surprise at the threat of downgrading.

Furthermore he questioned the timing of the news just ahead of the EU summit on Friday. “This cannot be a coincidence.”

On the whole, Juncker said that the credit rating agencies should not be given more belief than is their due, pointing out that they collectively failed to see the 2007/8 US sub-prime crisis coming, granting those financial products highest ratings at the time.

“Insofar, I think the value judgement delivered by the rating agencies is a judgement that needs to be questioned constantly,” continued Juncker. “I think it would be better if we didn't take the ratings as seriously as the rating agencies themselves do.”

Germany and France also on the menu

While Juncker spoke in favour of France and Germany's call for a change of the EU treaty to ensure tighter budget controls, he was quick to point out that other EU members, especially the BeNeLux countries, had already spoken out about similar measures. “It is not a German or French privilege to now speak out for stability,” Juncker commented.

On the whole he said he hopes for the ratification of a treaty change by March 2012, at least for the 17 eurozone members, and to make significant progress on the matter at Friday's summit.