February 18, 2020
The number one threat to economies is fascism.
In an interview with Il Sole 24 Ore, Kathrin Muehlbronner , senior vice president of Sovereign Risk at the New York rating agency Moody’s, said: “One aspect that we carefully monitor is the spread of populism among the population in Europe. And also in Italy. If the majority of citizens approach populist ideas or parties, obviously we cannot ignore it “.
These are very significant words, if you think that it is Muehlbronner herself, together with her staff, that determines the rating of one country. What if parties that the agency classifies as “populists” eventually come to power? In that case, a rating cut would the obvious answer.
This also suggests that Moody’s is less interested in the real underlying economic issues.
You’d think with the track record these rating companies have, nobody would care what they say anymore.
But they still do, for some reason.
Her warning is reminiscent of one pronounced in May 2018 by the then European Commissioner for the Budget, Gunther Oettinger (who was later forced to apologize) when he said that “the markets will teach Italians to vote in the right way”.
It seems as if Moody’s is not aware that the definition of “populism” is so broad that it could take on various meanings and connotations. According to the political scientist Francis Fukuyama, for example, “populism is the label that elites put on policies that they don’t like but that have the support of citizens…”
That’s a much more accurate definition than anything you’ll read in the mainstream media.
In October 2018 the agency cut Italy’s rating from BAA2 to BAA3 but with a stable outlook. The decision was linked to a “concrete change in the budgetary strategy, with a significantly higher deficit than expected” and this implied the continuation of “weak growth in the medium term”.
Rating agencies were magically “calmed down” when the Italian Democratic Party returned to government, after the “turnaround” last August that brought the League back to the opposition.
In 2017, the agency’s top European analyst warned that France’s rating could be weakened if Marine Le Pen reached the second round of the presidential elections.
Funny how the supposedly free market keeps malfunctioning whenever some people who don’t want to flood their countries with infinity monkeypeople come to power.
I’m sure it’s just a coincidence, of course…
Can’t be anything else.