The European governments, which have recently been placed under intense pressure from Brussels to reduce national commitments have, in turn, the very European Commission (EC) to restrict their spending. It turns out that the Commission now considers not only to use the savings, but even increased their administrative costs for next year, according to the draft prepared for 2011 these costs increased by 4.5 per cent compared to 2010. Discussion of a draft will begin on Tuesday by finance ministers in Europe, the debate appears to be heavy, said AFP. “We agree to spend better, but not to spend more, told the agency unnamed European diplomat. “However, the European Commission is one that asks all States to make efforts to reduce budget deficits, it should do the same in their own finances,” he added. “You can not proceed as if no economic crisis.” Another condition of anonymity, a diplomat said eagerly waiting to learn why it is necessary budget committee to increase, provided that calls made to the Member States economies.
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Michel Barnier, EU Commissioner for Internal Markets, has warned that it may require additional regulations on the role of credit agencies in the markets, Air Force forward. He told Parliament that he was surprised by the rapid decrease in the rating of Greece. In December, will come into effect new rules for agencies under which they will have to explain how they decided to change a rating. According to Barnier, however, may require further tightening of regulations for agencies. He said he is considering creating a new agency to evaluate government ratings. Barnier stressed that the impact of the agencies is very important not only to companies but also for individual countries. At the end of April, Standard & Poor’s lowered its rating on Greece to “junk” (high-risk securities). Critics of the rating agencies indicate that they have so much power that their assessments are becoming self-realization is prophecy. Rating downgrades could lead to sales of government bonds or lack of interest in new issues. This lowered the price of bonds and increase their profitability, which in turn further limited government finances and theoretically can cause further decreases in ratings. In recent months, Greece has sought unsuccessfully to combat precisely this vicious circle.
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The International rating agency Moody’s will review over the next three months the credit rating of Portugal with a possible decrease in the direction of one or two degrees, said in a statement the agency, quoted by RIA Novosti. Now Portugal’s credit rating is “Aa2″. The intention of Moody’s is continuing to assess the situation to deteriorate to government debt. In the view of analysts from the rating agency, taking into account the small size of the economy of Portugal and its poor growth performance of these public debt may not fully reflect the rating of “Aa2″. At the end of April ratings agency Standard & Poor’s lowered the long-term credit rating of Portugal with two degrees – from “A +” to “A-” to “negative” outlook. At the end of 2009 government debt of Portugal was up nearly 77 percent of gross domestic product (GDP) of the country, for comparison, the external debt of Greece has 120% of GDP. Meanwhile, analysts note that in Portugal the threat can come from many large private sector debt, which exceeded the indicator for Greece. According to forecasts by the European Commission (EC) GDP growth this year Portugal will be 0.5 percent and for 2011 – 0.7%.
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Hungary gave the receipt of a new tranche of aid from the European Union, said European Commission (EC). From Brussels, however, specify that the money will remain available to the country in case of need. “Given the sustainable improvement of their external finance Hungary wants unblock international aid, said in a statement the European Commission, which notes that the country has dropped from its financing and in November. In Budapest the Minister of Finance Peter Osko confirmed the news to journalists, noting that it will be used the next tranche down – or the Commission or the International Monetary Fund (IMF). The reason is that “the country’s financing was provided by the markets,” AFP reported. Encounter serious difficulties from the effects of the global financial crisis in Hungary get a loan from a total of around EUR 20 billion from the IMF, EU and World Bank to deal with the effects of international capital leaking. This was the first country in the EU, which resort to emergency measures. EU promised to allocate aid to 6,5 billion euros, far Hungary has benefited from three tranches: a $ 2 billion euros in December 2008 and March 2009 and 1,5 billion euros in July 2009
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