French protesters demonstrated in front of S&P’s Paris offices after Friday’s downgrade. Some EU officials are waving regulatory threats objecting to timing and analysis which resulted in 8 other Eurozone states and France (from AAA to AA+) downgrade. After being highly criticized for having been too slow to reflect sharp credit deterioration in housing and the Mortgage Backed Securities debt, some of the current response to S&P comes a bit as hypocritical, counter-progressive, self-defeating or all and more of above. "Some of the socialists and conservatives say it's a good thing to have the option to ban the publishing of ratings if they do come at the wrong moment," according to Wolf Klinz, a German Liberal member of the European Parliament said. "What I do think that could happen is some members of the parliament that are in favor of banning publication of negative ratings will try to reintroduce that in the proposal." "Regarding sovereign ratings we have to organize things better and have rules that are more specific and take into account public debt. I will propose an amendment to that effect personally," according to Jean-Paul Gauzes, a French center-right member of the EU assembly, From Reuters Report : “some politicians could now go further and ask for publication to be banned if it comes at an 'awkward' moment for the country concerned. This could cover election campaign periods, or bailout negotiations, although in practice would be very difficult to define and is considered unworkable by many.” (Reuters Link- www.reuters.com/article/2012/01/16/eu-ratingagencies-regulation-idUSL6E8CG1GK20120116) Mario Draghi was less rhetorical but nonetheless transparent in his dislike for the role of the rating agencies. “I will never comment on ratings as such, but certainly one needs to ask how important are these ratings for the marketplace overall, for investors? It seems to a great extent markets have anticipated these ratings changes and priced them in. We should learn to do without ratings.” From outset of crisis, French officials in particular have targeted the influence of rating agencies – at least in part because they perceive them as an extension of the US financial system where they were born and initially nurtured. When I was with Standard & Poor’s, (mid-1980’s) we opened our first overseas office – one professional and some of us made regular trips to London to buttress the development. It is fair to question whether the rating agencies have an evolutionary bias with respect to US markets. However, the impartiality of the analysis is paramount in the internal dialogue/debate from my experience. Still, that does not mean that ratings are always correct. In fact for institutions as corporations, governments and such hybrids as the European Financial Stability Fund (which was downgraded also yesterday – January 16, 2012), the rating almost always will turn out to need review and change as the environment also evolves. Rating changes are inevitable and are more likely than not to occur at most inopportune moment. Further, the opinion of the rating agency and any implicit fiduciary responsibility is more toward investor rather than issuer who may rely upon such “opinion.” As most European officials recognize, the rating agencies may be wrong more or less frequently but it is not healthy regulatory policy to attempt to stifle the analysis or opinion. Read –“Eurozone Downgrades from Bad to Worse” - diplomaticallyincorrect.org/films/blog_post/eurozone-downgrades-from-bad-to-worse-by-ambassador-mo/43633 By Ambassador Muhamed Sacirbey Facebook – Become a Fan at “Diplomatically Incorrect” 

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