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EU may crack down on rating agencies

business Updated: Nov 17, 2011 22:22 IST
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The European Union wants to allow investors to sue rating agencies for compensation if they break EU rules "intentionally or with gross negligence."

The move is part of a package of regulations for credit rating agencies proposed on Tuesday by the European Commission, the EU's executive arm.

Internal market commissioner Michel Barnier said "ratings have a direct impact on the markets and the wider economy and thus on the prosperity of European citizens. They are not just simple opinions."

Move fast: Merkel

German Chancellor Angela Merkel urged Italy's new prime minister Mario Monti on Thursday to move fast to implement "crucial" reforms, as he was set to unveil an economic crisis plan. "You enter office at a difficult time for your country as well as for the eurozone as a whole, in which great hopes and expectations are directed at you," Merkel wrote to Monti in a letter.

France, Germany clash

France and Germany, clashed on Wednesday over whether the European Central Bank (ECB) would intervene more forcefully to halt the euro zone's accelerating debt crisis after modest bond purchases failed to calm markets.

Facing rising borrowing costs as its 'AAA' credit rating comes under threat, France urged stronger ECB action.

But Merkel made clear Berlin would resist pressure for the central bank to take a bigger role in resolving the debt crisis, saying EU rules prohibited such action.