The downgrade of Portugal’s debt to junk status by the credit ratings agency Moody’s should serve as a wake-up call to the rest of Europe, says the country’s president.
Describing the move as a “detonator”, Anibal Cavaco Silva called on European leaders to face up to American ratings agencies which he said, posed a threat to European economic stability.
Maria João Rodrigues, a Portuguese economist and advisor to the European institutions has told euronews she finds the downgrade appalling.
“In my opinion, the moment has come for Europe to have its own ratings agency which evaluates countries and companies according to criteria that are those of the European project,” she said.
Rodrigues went on to outline her ideas for strengthening the euro zone.
“In order for the euro zone to be stable in future, member states must be guaranteed low interest rates so that they can invest and grow. This is a fundamental condition for survival in the euro zone. Today, in the face of financial markets which apply a great deal of pressure, the only way to guarantee acceptable interest rates so that all countries and regions can invest, is through eurobonds.”
The downgrade, hot on the heels of Portugal’s new austerity plan, has brought more criticism. The country’s debt agency called it “superficial” and “arrogant”. Lisbon council says it is to suspend its contract with Moody’s.