In the wake of the downgrading of Ireland’s debt to junk, here’s (via the very pro-EU Guardian) the EU’s response:

The commissioner in charge of the EU’s single market, French politician Michel Barnier, alternately sneered and threatened the three big agencies who dominate 90% of the ratings industry: Standard & Poor’s, Moody’s and Fitch.
His remarks followed a broadside on Monday from fellow commissioner Viviane Reding, who said the ratings agencies’ “cartel” should be “smashed up” as they were seeking to determine the fate of Europe and its single currency.
“We were surprised that the agencies would downgrade a country without any warning,” Barnier said of last week’s verdict from Moody’s on Portugal, branding its debt junk and predicting the country was the new Greece. “You don’t rate a country the same way you rate a company or a product. That’s an issue. We’re examining that issue.”
Barnier said he would announce “stiff measures” in November aimed at taming the power of the agencies. They would be forced to justify their decisions by revealing the details of their analyses and criteria. Whether they were properly registered in Europe would also be scrutinised. “I want to have transparency regarding their methods, especially when they are rating countries,” he said.

Note the comment about whether the agencies are “properly” registered in Europe. I’m no fan of the ratings agencies, but that sounds like a threat to me. Incidentally, it’s worth noting that Fitch is, as the Daily Telegraph’s Ambrose Evans-Pritchard pointed out the other day, a subsidiary of a French group, Fimalac.

The Guardian’s report also contains this delightful detail:

Christine Lagarde, the new IMF chief, when French finance minister, suggested that the agencies be banned from delivering ratings decisions on the eurozone countries being bailed out: Greece, Portugal and Ireland.

Well, that’s just great . . .