EU Blames Rating Agencies for Financial Crisis

The European Union has declared an all-out war against speculators, with European leaders blaming credit rating agencies for causing the fiscal crisis in southern Europe.

The European Finance Ministers’ Meeting in Brussels Sunday discussed the formation of a European-style financial relief fund similar to the International Monetary Fund, stricter regulation of financial market participants including credit rating agencies, and the toughening of oversight over financial soundness of EU member countries.

EU leaders also agonized over defending the euro in their own countries over the weekend. French President Nicolas Sarkozy and Italian Prime Minister Silvio Berlusconi even canceled trips to Moscow to attend events marking the 65th anniversary of the end of World War II.

With negative sentiment growing against credit rating agencies over their supposed destabilization of the financial markets, analysts say the EU will devise tougher regulations to control such agencies before financial markets open Monday.

On top of the bailout package worth 110 billion euros for Greece, the leaders also discussed a plan to mobilize an additional 70 billion euros to assist countries facing bankruptcy crises. They effectively suggested the establishment of a European-style monetary fund.

Certain leaders even went so far as to urge EU authorities to come up with specific measures before financial markets opened Monday.

The EU finance ministers’ meeting was assembled after Luxembourgian Prime Minister Jean-Claude Juncker said "We will devise solid defensive measures to protect the euro by Sunday night,” at the eurozone summit Friday.

“The euro is under systematic global attack,” he said. “The eurozone must unite to cope with it.”

The eurozone summit was assembled to approve the bailout packages of the eurozone and IMF for Greece finalized May 2. The meeting turned into an occasion for discussing measures to safeguard the euro as the situation turned from bad to worse.

Soon after the summit, French President Sarkozy said, “The euro is a core element of the eurozone, and we cannot place the currency at the disposal of speculators,” adding, “We will not allow other forces to spoil what our previous generation established (euro).”

German Chancellor Angela Merkel also said Saturday, “European countries will devise special measures to stabilize the euro and cope with speculation,” adding, “We will create a common apparatus to counter forces threatening the currency’s stability and its speculators.”

pisong@donga.com