Brussels, 09/11/2005 (Agence Europe) - The European Central Bank is apparently prepared no longer to accept or recognise certain assets of euro zone Member States with a grading from one or more agencies tasked with assessing the risk of financial solvability below an "A negative" ("A -"), according to Wednesday's Financial Times. At this stage, the ECB's list on assets eligible as a guarantee for the reimbursement of liquid assets includes no assets with a grading below this threshold. This means that no Member State bond has been refused, the British daily notes. With its grading of just "A", Greece has the lowest of the euro zone (the best mark possible is "AAA"), but also Portugal and Italy ("AA -" each) would come under the greatest threat by such a change. In effect, if, as part of its market operations, the ECB no longer accepts the bonds of States hit by a grading below "A -", the countries whose public finances (particularly their debt) are in the worst shape will come off worst. The more a country's grading drops, the greater the interest rates its government will have to pay to finance the debt. By leaving it up to the market to penalise the Member States which spend the most, via grading agencies, the ECB is finding a way round the problems it has experienced in putting these countries on the right track of the Stability and Growth Pact by political pressure alone, according to the FT. It is worth emphasising that this kind of approach, which does not necessarily enjoy a consensus, will certainly not step up the pressure on Member States such as France and Germany, which always receive good grades. The ECB has not confirmed this change in policy, which it apparently intends to present as an effort in favour of transparency, the FT continues.
Commissioner Almunia stressed that it is "important for Member States to respect the criteria of healthy public finances, and to this end, to ensure healthy finance conditions", his spokesperson told the press on Wednesday, but she declined to comment further.