European Central Bank governing council member Christian Noyer said that credit-rating companies have become “incomprehensible and irrational” and said the U.K. should be downgraded before France, according to an interview published in Le Telegramme newspaper.
The remarks come 10 days after Standard & Poor’s said it was considering stripping France and Germany of their AAA credit ratings and that France may be downgraded by two levels.
“A downgrade doesn’t strike me as justified based on economic fundamentals,” Noyer, who is governor of the Bank of France, told the Brittany-based newspaper. “Or if it is, they should start by downgrading the U.K., which has a bigger deficit, as much debt, more inflation, weaker growth and where bank lending is collapsing,” he said.
As with its decision to strip the U.S. of its AAA rating in August, S&P’s cited the flaws in Europe’s political process as a key determinant in its decision. The ratings company said Dec. 5 that the “continuing disagreement” over how best to tackle the crisis compelled it to consider the region’s governments for downgrades.
“There is more politics than economics” in the arguments that rating companies develop now, Noyer said. Noyer said he hasn’t been informed about any decisions yet to be announced.
A Bank of France spokeswoman confirmed the comments.