We in Europe – the old continent – have taken notice since late Friday that our credibility as a debtor has been put into question. We were warned earlier that something was waiting to happen. Now that it has materialized, I nevertheless have some questions running through my mind lately, based upon the following fundamentals and credit scores :
The thing is I don’t understand. But being a humble economist, I am always willing to learn. You see, in your latest evaluation of countries like Hungary and Estonia, you have been questioning the credit rating and countries’ qualities based upon leverage. And more specifically private sector leverage. So I don’t really understand the ranking and rating of these countries. And when you look at the above table – based upon Worldbank and OECD stats using the same methodology – I am a little bit confused as well for other countries (Spain, Italy, Portugal, E-Europe mentioned), coincidentally relative to English speaking countries. Now your methodology probably uses other criteria but then again, I get confused. If it’s about a corruption index, open economy index and market openness, public leverage, I have some difficulties in understanding the data shown above linked to the credit ratings and relative rankings of different countries.
Now if it’s an arbitrary exercise – and based upon the scarce info available to this humble economist it seems so but you can always enlighten me – that would be OK. As long as you admit it, then we can make an end to this misplaced prank and stop paying you fees for repeating this exercise. If not, I am open to any rational explanations. I will even help you on these, just nod if it makes any sense
1) We change our language on the entire continent into English. Dialects are admissible, as long as it doesn’t sound paddy Irish.
2) If 1 is a required but not a sufficient condition, we have the printing presses warming up. To this extent, you have to give Mario Draghi a break on credit ratings because he has not been that long in office, should still learn a bit (Goldman, quick process) and he has already been trying hard. I believe we deserve the benefit of the doubt here.
3) If it is something else, we would also like to be informed, really whatever, but please let us know !
In the mean time, I am anxiously awaiting your reply and remain
An anonymous economist