Credit rating agency Standard & Poor’s has warned that the triple A status of six European countries, the Netherlands among them, may be about to be downgraded. Should we be worried?, asks the Volkskrant.

The short answer to that question, the paper writes, is yes, we should. Credit rating agencies like S&P, Moody’s and Fitch are very powerful. Their advice impacts directly on what happens on the stock exchange and negative assessments of a country’s financial status can often lead to a (considerable) drop in prices. Add to that a lower credit status and interest on public loans soar.
US benefits
The fact that more than one country is facing a threat to their triple A status does not make it better, the paper writes. If the American rating remains the way it is, the US benefits and Europe falls behind.
With another European meeting around the corner the agency has timed its warning well, the paper says. It’s a way of keeping the pressure on European leaders: come up with a substantial package or else.
If the meeting does not produce results, chances are that credit ratings will be downgraded within three months, the paper warns. S&P would lose credibility if it failed to act on its own warning.
Power
It is just this sort of power that politicians have come to resent. Eurogroup chairman Jean Claude Juncker, called the decision ‘dishonest and wildly exaggerated’ while European Central Bank executive board member Christian Noyer says the role of the agencies should be reconsidered. Noyer feels they are increasingly driven by political motives rather than the economic reality.
But there is not much they can do. The agencies have the financial markets on their side. And market confidence is crucial to a country’s financial health. It is the agencies’ trump card.
Dutch finance minister Jan Kees de Jager has also criticised the agencies which he said, ‘had nodded off’ while the Greek debt crisis grew. ‘Maybe the IMF rather than the agencies should be the one to listen to’, he said.