Some things are so blatantly stupid they sound like a headline from the news spoof site The Onion.
Here is a case in point, and had this been April 1, everyone would have thought I was making this up.
Courtesy of Google Translate and Deutschland Financial Times please consider a “Radical Proposal“.
In a confidential preliminary plan to reform the law on credit rating agencies, EU Internal Market Commissioner Michel Barnier seeks to prohibit rating agencies from publishing judgments about ailing EU countries.
Barnier proposes that the new Securities and Exchange ESMA is granted the right “to temporarily prohibit” the disclosure of assessments of the ability to pay.
Barnier has advised the rule take effect in November and wants to hold rating agencies civilly liable for damage caused by “poor” ratings.
Never Underestimate the Stupidity of Bureaucrats
EU Commissioner Michel Barnier obviously believes the rating is the problem, not the debt, or the likelihood the debt is paid back.
What about ratings that are too high?
Never, ever, underestimate the blatant stupidity of government bureaucrats, especially desperate bureaucrats. Instead, one can look at such asinine proposals and make a simple judgment: the s*** is about to hit the fan.
IMF Report on Greece Held Up in Dispute with EU
The Greek website Ekathimerini reports Brussels at odds with IMF about sustainability of Greek public debt
The differing views between the European Commission and the International Monetary Fund on the sustainability of Greece’s debt have led to a delay in the issuing of a report by Brussels on the country.
The IMF is maintaining a tougher stance vis-a-vis the Greek debt and how viable it could be and is seeking the drafting of a new streamlining program, as it considers the Commission’s estimates too optimistic.
Austrian Finance Minister Maria Fekter said that “Austria’s position is that the new package requires a somewhat greater participation of the private sector,” but always on a voluntary basis. However, the time frame is particularly tight for an agreement as the eurozone summit of this Sunday is fast approaching and the aim of bring Greek debt below 100 percent of GDP by 2020 seems difficult.
2020 Target for Greece
Please note the open discussion of a 2020 target date for Greece. Bear in mind that is for a debt-to-GDP ratio of 100% not the 60% as required by EU treaty.
Also note the preposterous idea that haircut participation is “voluntary”. And what’s with this
“somewhat greater participation” participation nonsense?
A quick check this morning shows that the yield on 1-year Greek bonds hit a high of 189%.
I would be remiss if I failed to point out the 10-year yield on Portuguese debt is and even bigger 12.14%. Portugal is without a doubt the next country in Europe to blow.
Finally, and in case you missed it, please consider the Blatant Arrogance of France in dealing with this mess.
Mike “Mish” Shedlock
Click Here To Scroll Thru My Recent Post List