A Public European Union Credit Rating Agency: The Politics of Creditworthiness and European Sovereign Debt

Implicated in numerous financial scandals and fiscal misadventures, credit rating agencies (CRA) have managed to evade any serious regulatory capture. Now the European Union is exploring a structural solution which would disrupt the CRAs virtual monopoly on the production of authoritative knowledge surrounding creditworthiness: an EU CRA. However, as I argue, this proposition is fraught with perils which can only exacerbate the EU’s capacity to effectively manage its sovereign debt crisis. Without a revision in the analytics of ratings, a public CRA is destined to entrench a fictitious dichotomy between uncertainty and risk in the construction of creditworthiness. The performative effect of this would reinforce its peripheral role as it subjects the EU to an artificial uniformity and undermines the legitimacy of the new agency as a credible alternative to the established big three CRAs.