Portugal’s rating should increase, but agencies “are political”

  • ECO News
  • 31 May 2017

The economist Joseph Stiglitz believes rating agencies are not as independent as they say they are. The North-American defended Mário Centeno, saying he "would be good" for the Eurogroup.

Joseph Stiglitz, who won the Nobel Prize for economics in 2001, stated agencies should change their rating on the Portuguese sovereign debt, yet it is “unclear what they will do” because they have political motivations, the economist stated.

The North-American economist, who was in Portugal being awarded for his latest book, stated Portugal’s rating “should be updated” to a more positive rating, but rating agencies “have a terrible curricula”, and act according to their political aims.

“We cannot speak of rating agencies and say these institutions are rational, well-founded or knowledge-based”, stated Stiglitz in the press conference. “These are profoundly political institutions who pretend to be independent and objective assessors”. Because of this, although Portugal’s rating should increase, “since those agencies are political, it is unclear what they will do”. He also added: “Concerning Portugal, I don’t know what their goals”.

Joseph Stiglitz, North-American economist, states Portugal’s rating should increase. Paula Nunes/ECO

Centeno heading the Eurogroup? “That would be good”

When asked about Mário Centeno, Joseph Stiglitz stated the Portuguese minister “has been making a good impression in Europe”. And would he be a good candidate for the presidency of the Eurogroup? “I believe it would be good for the Eurogroup to be headed by someone who better understands the diversity of the Euro Area”, stated the economist, who has been very critical of the way the euro and the monetary and internal policies imposed by the Group influence those country’s economic recovery.

“I would like to state once again how appalled I was, as an external spectator, by Dijsselbloem’s comments”, Stiglitz stated, speaking of the Eurogroup president’s comments on European Southern countries. “He should have resigned. It is time Europe is represented by someone who better understands the difficulties faced by the Euro Area as a whole, and who shows more empathy”.