French downgrade "not justified": ECB's Noyer
A downgrade of France's AAA credit rating would not be justified and ratings agencies are making decisions based more on politics than economics, European Central Bank policymaker Christian Noyer said on Thursday.
Speaking in an interview with local newspaper Le Telegramme de Brest to be published later on Thursday, Noyer also questioned whether the use of ratings agencies to guide investors was still valid.
"In the arguments they (ratings agencies) present, there are more political arguments than economic ones," said Noyer, the head of the Bank of France and a member of the ECB's governing council.
French Foreign Minister Alain Juppe said on Wednesday that decisions by rating agencies were "sometimes subjective and political," and that any loss of France's top-notch AAA rating would be regrettable but not disastrous.
Standard and Poor's is due to decide whether or not to downgrade euro zone countries in the coming days following an EU agreement on Friday to forge tougher fiscal rules.
"The downgrade does not appear to me to be justified when considering economic fundamentals," Noyer said. "Otherwise, they should start by downgrading Britain which has more deficits, as much debt, more inflation, less growth than us and where credit is slumping," he said.
Noyer was also unhappy about critical comments from ratings agencies following last week's EU summit in Brussels. He said such comments had weakened positive sentiment that arose in the markets following the agreement to draft a new treaty for deeper integration in the euro zone.
"Frankly, the agencies have become incomprehensible and irrational. They threaten even when states have taken strong and positive decisions," Noyer said. "One could think that the use of agencies to guide investors is no longer valid."