Category Archives: Truthful and Transparent

Shoveled: Garuda Boss Fired for Smuggling Harley Davidson Bike and Brompton Bicycles

Jakarta Globe, NUR YASMIN, December 5, 2019

The disassembled parts of a smuggled Harley Davidson Shovelhead are shown 
by customs officials in Jakarta on Thursday. (B1 TV Photo)

Jakarta. Flag carrier Garuda Indonesia's president director I Gusti Ngurah Ashkara is soon to be fired for allegedly smuggling a Harley Davidson motorcycle and two Brompton bicycles, State-Owned Enterprises Minister Erick Thohir said on Thursday.

The items were smuggled inside Garuda's brand new Airbus A330-900 Neo being delivered from its factory in Toulouse, France, in mid-November.

There were 22 passengers on the plane and four of them were Garuda directors: the president director, better known as Ari Ashkara, technical and services director Iwan Joeniarto, cargo and business development director Mohammas Iqbal and human resources director Heri Akhyar.

"As the SOE Minister, I will dismiss the Garuda president director. We will not stop there; we will look for other people who might have been involved in this case as well," Erick told a press conference in Jakarta.

The used Harley Davidson motorcycle had been disassembled prior to delivery and smuggled as parts. Customs officials found them wrapped in 15 boxes inside the plane's cargo area.

The Brompton bikes and accessories were found in three other boxes.

Erick said an audit by the customs office showed the smuggled items belonged to the president director, despite the baggage claim tags carrying different names.

Ari had instructed his subordinates to find him a classic Harley Davidson Shovelhead from the 1970s.

The used motorcycle was purchased in April 2019 with the help of a Garuda finance manager in Amsterdam.

"It's really sad that this [personal] transaction had to drag down an SOE," Erick said.

The Coordinating Minister for Maritime Affairs and Investment Luhur Binsar Pandjaitan said during a visit to Tongxiang, China, on Thursday that he fully supported Erick's decision.

"[An act like] this will hurt our investment climate," he said.

Finance Minister Sri Mulyani Indrawati meanwhile said smuggling the Harley and the Bromptons had cost the country up to Rp 1.5 billion ($107,000) in unpaid taxes.

"The Harley bike is valued at Rp 800 million and the Brompton bicycles cost Rp 50-60 million each," Sri Mulyani said.

"Everyone should always obey existing regulations," she told reporters.

Lap of luxury: Indonesian jailers busted over fancy cells

Yahoo – AFP, 23 July 2018

Outside authorities found several cells that featured modern bathrooms with hot
showers, full-sized refrigerators, coffee makers, microwave ovens and stereo loudspeakers

Inmates at an Indonesian prison paid for luxury cells equipped with air conditioning, flat-screen TVs and private washrooms, anti-graft officials said, in the graft-riddled country's latest corruption scandal.

Jail staff allegedly took bribes of 200-500 million rupiah ($14,000-$35,000) from inmates to renovate cells and supply banned mobile phones or even let them temporarily leave prison, Indonesia's Corruption Eradication Commission (KPK) said.

Anti-graft agents arrested five people connected to the scandal at Sukamiskin prison, including inmates and the warden who got cash and a pair of vehicles to look the other way, it added.

A raid on Sunday turned up several cells that featured modern bathrooms with hot showers, full-sized refrigerators, coffee makers, microwave ovens and stereo loudspeakers, the KPK said.

"We apologise to the Indonesian people," Sri Puguh Budi Utami, the director general of Indonesia's prisons, told reporters late Sunday.

"We're very sorry that we still have not been able to maximise our monitoring systems."

A former tax official now serving time at Sukamiskin was once photographed watching a tennis tournament in Bali and had even travelled overseas on a fake passport when he was supposed to be in another jail.

Jail staff allegedly took bribes of 200-500 million rupiah ($14,000-$35,000) from
 inmates to renovate cells and supply banned mobile phones or even let them 
temporarily leave prison

The prison's other inmates include a former chief justice and ex-house speaker Setya Novanto, who was convicted in April of taking millions of dollars in kickbacks and bribes linked to the national roll-out of government ID cards.

They were not among the inmates or prison staff arrested Sunday.

Indonesian prisons are more commonly known for their poor conditions and outbreaks of violence.

But it is an open secret that the rich and powerful can buy luxury on the inside, prompting the government to warn last year that it would jail guards or other staff caught taking bribes from inmates in exchange for special treatment.

In one of the highest-profile cases, a businesswoman imprisoned for bribery had a cell with a spring mattress, couch, refrigerator, television and air conditioning -- and adjoining karaoke room.

Malaysia’s Mahathir wins shock election victory, toppling 61-yr-old regime

Yahoo – AFP, Martin Abbugao, May 9, 2018

As it became clear that Mahathir had won, supporters took to the streets
waving flags of the opposition alliance (AFP Photo/Mohd RASFAN)

Malaysia's veteran ex-leader Mahathir Mohamad, 92, won a shock election victory Thursday, in a political earthquake that toppled the country's scandal-plagued premier and ousted a regime that has ruled for over six decades.

It was a stunning triumph that almost no one had predicted and ended the long hold on power of the Barisan Nasional (BN) coalition, which has ruled Malaysia since its birth as an independent country.

The victory capped a dramatic political comeback for Mahathir, who previously ruled the country with an iron fist for 22 years, and came out of retirement to taken on Prime Minister Najib Razak after the leader became embroiled in a massive corruption scandal.

When he takes power, Mahathir will be the oldest prime minister in the world.

His victory spells big trouble for Najib -- Mahathir has vowed to bring him to justice over allegations that billions of dollars were looted from sovereign wealth fund 1MDB, which the scandal-plagued leader set up and oversaw.

But at a press conference, Mahathir vowed: "We are not seeking revenge. We want to restore the rule of law."

Mahathir's return to the political frontlines saw him throw in his lot with an opposition alliance filled with parties that he crushed while in power, and which includes jailed opposition icon Anwar Ibrahim -- his former nemesis.

When he takes power, Mahathir Mohamad, 92, will be the oldest prime minister
in the world (AFP Photo/Manan VATSYAYANA)

As well as seizing control of the national government, several state legislatures across the country fell into opposition hands for the first time, including the highly symbolic bastion of Johor, the birthplace of Najib's party that was the lynchpin of the ruling coalition.

Official results from the Election Commission showed that Mahathir's opposition grouping Pakatan Harapan, along with an ally in the Borneo state of Sabah, had secured 115 parliamentary seats. 112 are needed to form a government. BN were on 79 seats with just a few left to count.

As it became clear that Mahathir had won, supporters took to the streets waving flags of the opposition alliance.

After polls closed earlier in the day, journalists had flocked to the headquarters of Najib's United Malays National Organisation (UMNO), the lynchpin in the ruling coalition -- but he failed to turn up to give a victory speech and the media were told to leave.

Huge numbers of voters earlier flocked to the polls across the country, despite Najib having called the election on a weekday in what critics said was a bid to keep turnout down.

The BN wipeout is a disaster for Najib, who had been under pressure to score an emphatic win after the government lost the popular vote for the first time at the last elections in 2013.

The controversy surrounding 1MDB has dogged Najib since the story exploded in 2015. Billions of dollars were allegedly stolen from the fund, which was set up and overseen by Najib. The leader and 1MDB deny any wrongdoing.

But in rural areas, the rising cost of living, which has hit poor Malays hard, was the main concern at the election particularly after the introduction of an unpopular sales tax in 2015.


We Built a Strong Case Against Setya Novanto: KPK

Jakarta Globe, Alin Almanar, December 11, 2017

Setya Novanto has been charged with embezzling Rp 574 billion ($42 million).
(Antara Photo/Aprillio Akbar)

Jakarta.Antigraft officials said investigators had built a strong case against Setya Novanto, as they countered arguments by expert witnesses during a hearing on Monday (11/12).

Setya has filed again a pretrial motion with the South Jakarta District Court to clear him as a graft suspect. The same court ruled in late September that naming Setya as a suspect in July was "procedurally flawed" and the charges were invalid.

Three witnesses brought by Setya's lawyers to the court on Monday questioned the validity of evidence against him.

One of the witnesses, Mudzakir, a criminal law expert at the Islamic University of Indonesia (UII) in Yogyakarta, said the evidence against the former House of Representatives speaker was invalidated by the ruling.

According to him, the move to charge Setya again in late October was therefore based on "outdated evidence."

"It's similar to opening again an investigation that has been halted. If there's no new evidence, it can't be reopened," he said.

But a Constitutional Court ruling issued this year, cited by antigraft officials during the hearing, allows investigators to rely on evidence that was used against a suspect who has won a pretrial motion.

"A pretrial verdict shouldn't hamper investigators' efforts to handle a case," said Evi Laila Kholis, a member of the Corruption Eradication Commission (KPK) legal bureau.

The evidence against Setya had also been "complemented," KPK officials said.

In the next days, the KPK is going to bring five witnesses to the South Jakarta District Court, whose ruling is expected on Thursday.

Setya has been charged with embezzling Rp 574 billion ($42 million) from the Rp 5.9 trillion procurement of national electronic identity cards (e-KTP) project. He can face 20 years in jail, if found guilty.

The graft case resulted in Rp 2.3 trillion state losses.

Related Article:


Paul Hellyer – Abolishing Fed and new energy disclosure key to US survival





 Related Articles:


Rothschild family

The company formed by the union of Bumi Resources and
Berau Coal Energy is looking to acquire coal mines around
the world and become a global giant, investor Nathaniel
Rothschild, left, said on Friday, Dec 17, 2010.

Bilderberg Group 2011: Arab Spring, DSK top secret agenda




Eustace Mullins - Who Rules Your Rulers? from Ritchy_Niburu_2 on Vimeo.

Law Enforcers Sign Whistle-Blower Protection Agreement

Jakarta Globe, UlmaHaryanto, July 19, 2011

Agus Condro, the whistleblower in the Miranda Goeltom Bank Indonesia
bribery scandal. (JG Photo/Safir Makki)  
   
Relatedarticles

Topofficials from Indonesian law enforcement institutions gathered at the AryadutaHotel in Central Jakarta on Tuesday to sign an agreement granting protection towhistle-blowers as an integral part in the fight against crime.

"Thisagreement is a joint commitment of law enforcement institutions to provideprotection to whistle-blowers as justice collaborators," said Abdul Haris,chairman of the Witness and Victim Protection Agency (LPSK).

He wasjoined at the signing by Supreme Court Chief Justice Harifin A. Tumpa, JudicialMafia Eradication Work Unit chief Kuntoro Mangkusubroto, Coordinating Ministerfor Political, Legal and Security Affairs Djoko Suyanto, National Police ChiefTimur Pradopo, Justice and Human Rights minister Patrialis Akbar, AttorneyGeneral Basrief Arief, and Corruption Eradication Commission (KPK) chairmanBusyro Muqoddas.

Protectionfor whistle-blowers, Haris said, was important in revealing corruption andother serious or organized crimes.

JudicialMafia Eradication Task Force secretary Denny Indrayana added that his team,together with the LPSK, had pushed for a revision of the 2006 Law on Witnessand Victim Protection.

"Throughthe joint agreement and international seminar we hope to have helped lawenforcement officials understand the issues and speed up the revisionprocess," Denny said.

It isunclear if the new agreement would affect the sentencing of the whistle-blowerin the Miranda Goeltom Bank Indonesia bribery scandal.

The man whowent public with the case, Agus Condro Prayitno, a former lawmaker from theIndonesian Democratic Party of Struggle (PDI-P), is serving a 15-month jailsentence for accepting a bribe in exchange for voting for Miranda as a BankIndonesia deputy governor in 2004.

S&P warning puts damper on Eurogroup plans

Deutsche Wellle, 5 July 2011

Standard & Poor's is critical of
the banks' plans
The Standard & Poor's rating agency says a debt rollover plan pushed by French banks would amount to a default, putting a damper on European efforts to solve the Greek debt crisis.

French banks last week thought up what they figured was a really good plan: a debt rollover plan under which some of the Greek bonds would be voluntarily renewed when they become due, but on different terms, giving Greece some breathing space without actually reducing the amount owed to creditors.

German banks, which together with French banks and insurance companies are among the major holders of Greek debt, agreed to the plan - and so did the German finance ministry.

But the ratings agency Standard & Poor's warned on Monday that this option "would likely amount to a default under our criteria." The other two major rating agencies, Fitch and Moody's, did not react immediately, but it was expected that they could well come to a similar assessment.

S&P warning calls into question second bailout package

Since German banks have made it clear that any solution to the Greek debt crisis which rating agencies viewed as a default was not viable, that would call into question the voluntary contribution of banks and insurance companies to a second bailout package designed to help Greece through to 2014.

Eurozone finance ministers put off
deciding on a second bailout package
to help Greece
At the weekend, the finance ministers of the 17 eurozone countries put off a decision about such a bailout, which is expected to amount to 80 to 90 billion euros ($116 to 131 billion) because of conflicts over the extent of private sector involvement in the effort.

The eurozone ministers did sign off an 8.7 billion euros loan to Greece which is part of an 110 billion euros package agreed upon last year. Without this loan, the Greek government would have faced insolvency within weeks. But without a second bailout deal, a funding shortfall is imminent between 2012 and 2014.

Criticism grows louder of rating agencies' power

With the controversy surrounding a second bailout package due to the assessment of Standard & Poor's, criticism of the big rating agencies' power is growing louder.

ECB member Ewald Nowotny is
one of the rating agencies' critics
European Central Bank policymaker Ewald Nowotny told Austrian public radio that the rating agencies were placing obstacles in the way of those banks willing to contribute to Greece's financial stabilization.

The Bavarian finance minister, Georg Fahrenschon of the conservative Christian Social Union party, or CSU, told the German newspaper Passauer Neue Presse that the warning issued by S&P was "inappropriate." And Joachim Poss, finance expert for the Social Democrats in the German Parliament, told Deutsche Welle that the game the US rating agencies were playing had to make one "uneasy."

The three major rating agencies hold a collective market share of roughly 95 percent. Their special status has been cemented by law - at first only in the US, but then in Europe as well.

"The ratings from the big three were declared mandatory for European firms active in the US market," Thomas Straubhaar, the director of the Hamburg Institute of International Economics told Deutsche Welle.

The agencies rate the creditworthiness of companies and countries, as well as the quality of funds and stocks. Their assessment determines the conditions under which firms, banks or countries may borrow money on the capital markets.

"We can't have private companies, whose primary goal is maximizing profit, behaving like sovereign judges passing down opinions that are binding for disinterested third parties," Straubhaar said.

EU makes efforts to curb the influence of the three big players

Over a year ago, the heads of the state and governments of the 27 European member states called upon the Union's executive body, the European Commission, to come forward with proposals on how to supervise credit rating agencies. The Commission then proposed to set up a a new European supervisory authority, the European Security Markets Authority (ESMA).


The European Commission set up a new supervisory body for
rating agencies.

ESMA started work on January 1, promising to compel rating agencies to disclose the methodology of their ratings. But so far, the power of the big rating agencies appears unfettered.

Apart from calling for closer supervision of the big rating agencies, many European politicians have supported the creation of a European ratings agency. An independent European rating agency was indispensable, Bavarian finance minister Georg Fahrenschon said.

But economists are not so sure such a European agency would change much. "We don't need rating agencies to tell us that Greece is on the verge of bankruptcy," said Thomas Straubhaar. "A European agency would not be able change anything about this fact, nor could it correct it."

And Torsten Hinrichs of Standard and Poor's told Deutsche Welle investors were already free to place their trust in a whole range of agencies.

So even if a European ratings agency was to come into existence, it would still have to establish itself on the market and gain investors' trust.

Author: Andrea Rönsberg
Editor: Nicole Goebel

Related Articles:




S&P warning puts damper on Eurogroup plans

Deutsche Wellle, 5 July 2011

Standard & Poor's is critical of
the banks' plans
The Standard & Poor's rating agency says a debt rollover plan pushed by French banks would amount to a default, putting a damper on European efforts to solve the Greek debt crisis.

French banks last week thought up what they figured was a really good plan: a debt rollover plan under which some of the Greek bonds would be voluntarily renewed when they become due, but on different terms, giving Greece some breathing space without actually reducing the amount owed to creditors.

German banks, which together with French banks and insurance companies are among the major holders of Greek debt, agreed to the plan - and so did the German finance ministry.

But the ratings agency Standard & Poor's warned on Monday that this option "would likely amount to a default under our criteria." The other two major rating agencies, Fitch and Moody's, did not react immediately, but it was expected that they could well come to a similar assessment.

S&P warning calls into question second bailout package

Since German banks have made it clear that any solution to the Greek debt crisis which rating agencies viewed as a default was not viable, that would call into question the voluntary contribution of banks and insurance companies to a second bailout package designed to help Greece through to 2014.

Eurozone finance ministers put off
deciding on a second bailout package
to help Greece
At the weekend, the finance ministers of the 17 eurozone countries put off a decision about such a bailout, which is expected to amount to 80 to 90 billion euros ($116 to 131 billion) because of conflicts over the extent of private sector involvement in the effort.

The eurozone ministers did sign off an 8.7 billion euros loan to Greece which is part of an 110 billion euros package agreed upon last year. Without this loan, the Greek government would have faced insolvency within weeks. But without a second bailout deal, a funding shortfall is imminent between 2012 and 2014.

Criticism grows louder of rating agencies' power

With the controversy surrounding a second bailout package due to the assessment of Standard & Poor's, criticism of the big rating agencies' power is growing louder.

ECB member Ewald Nowotny is
one of the rating agencies' critics
European Central Bank policymaker Ewald Nowotny told Austrian public radio that the rating agencies were placing obstacles in the way of those banks willing to contribute to Greece's financial stabilization.

The Bavarian finance minister, Georg Fahrenschon of the conservative Christian Social Union party, or CSU, told the German newspaper Passauer Neue Presse that the warning issued by S&P was "inappropriate." And Joachim Poss, finance expert for the Social Democrats in the German Parliament, told Deutsche Welle that the game the US rating agencies were playing had to make one "uneasy."

The three major rating agencies hold a collective market share of roughly 95 percent. Their special status has been cemented by law - at first only in the US, but then in Europe as well.

"The ratings from the big three were declared mandatory for European firms active in the US market," Thomas Straubhaar, the director of the Hamburg Institute of International Economics told Deutsche Welle.

The agencies rate the creditworthiness of companies and countries, as well as the quality of funds and stocks. Their assessment determines the conditions under which firms, banks or countries may borrow money on the capital markets.

"We can't have private companies, whose primary goal is maximizing profit, behaving like sovereign judges passing down opinions that are binding for disinterested third parties," Straubhaar said.

EU makes efforts to curb the influence of the three big players

Over a year ago, the heads of the state and governments of the 27 European member states called upon the Union's executive body, the European Commission, to come forward with proposals on how to supervise credit rating agencies. The Commission then proposed to set up a a new European supervisory authority, the European Security Markets Authority (ESMA).


The European Commission set up a new supervisory body for
rating agencies.

ESMA started work on January 1, promising to compel rating agencies to disclose the methodology of their ratings. But so far, the power of the big rating agencies appears unfettered.

Apart from calling for closer supervision of the big rating agencies, many European politicians have supported the creation of a European ratings agency. An independent European rating agency was indispensable, Bavarian finance minister Georg Fahrenschon said.

But economists are not so sure such a European agency would change much. "We don't need rating agencies to tell us that Greece is on the verge of bankruptcy," said Thomas Straubhaar. "A European agency would not be able change anything about this fact, nor could it correct it."

And Torsten Hinrichs of Standard and Poor's told Deutsche Welle investors were already free to place their trust in a whole range of agencies.

So even if a European ratings agency was to come into existence, it would still have to establish itself on the market and gain investors' trust.

Author: Andrea Rönsberg
Editor: Nicole Goebel




S&P warning puts damper on Eurogroup plans

Deutsche Wellle, 5 July 2011

Standard & Poor's is critical of
the banks' plans
The Standard & Poor's rating agency says a debt rollover plan pushed by French banks would amount to a default, putting a damper on European efforts to solve the Greek debt crisis.

French banks last week thought up what they figured was a really good plan: a debt rollover plan under which some of the Greek bonds would be voluntarily renewed when they become due, but on different terms, giving Greece some breathing space without actually reducing the amount owed to creditors.

German banks, which together with French banks and insurance companies are among the major holders of Greek debt, agreed to the plan - and so did the German finance ministry.

But the ratings agency Standard & Poor's warned on Monday that this option "would likely amount to a default under our criteria." The other two major rating agencies, Fitch and Moody's, did not react immediately, but it was expected that they could well come to a similar assessment.

S&P warning calls into question second bailout package

Since German banks have made it clear that any solution to the Greek debt crisis which rating agencies viewed as a default was not viable, that would call into question the voluntary contribution of banks and insurance companies to a second bailout package designed to help Greece through to 2014.

Eurozone finance ministers put off
deciding on a second bailout package
to help Greece
At the weekend, the finance ministers of the 17 eurozone countries put off a decision about such a bailout, which is expected to amount to 80 to 90 billion euros ($116 to 131 billion) because of conflicts over the extent of private sector involvement in the effort.

The eurozone ministers did sign off an 8.7 billion euros loan to Greece which is part of an 110 billion euros package agreed upon last year. Without this loan, the Greek government would have faced insolvency within weeks. But without a second bailout deal, a funding shortfall is imminent between 2012 and 2014.

Criticism grows louder of rating agencies' power

With the controversy surrounding a second bailout package due to the assessment of Standard & Poor's, criticism of the big rating agencies' power is growing louder.

ECB member Ewald Nowotny is
one of the rating agencies' critics
European Central Bank policymaker Ewald Nowotny told Austrian public radio that the rating agencies were placing obstacles in the way of those banks willing to contribute to Greece's financial stabilization.

The Bavarian finance minister, Georg Fahrenschon of the conservative Christian Social Union party, or CSU, told the German newspaper Passauer Neue Presse that the warning issued by S&P was "inappropriate." And Joachim Poss, finance expert for the Social Democrats in the German Parliament, told Deutsche Welle that the game the US rating agencies were playing had to make one "uneasy."

The three major rating agencies hold a collective market share of roughly 95 percent. Their special status has been cemented by law - at first only in the US, but then in Europe as well.

"The ratings from the big three were declared mandatory for European firms active in the US market," Thomas Straubhaar, the director of the Hamburg Institute of International Economics told Deutsche Welle.

The agencies rate the creditworthiness of companies and countries, as well as the quality of funds and stocks. Their assessment determines the conditions under which firms, banks or countries may borrow money on the capital markets.

"We can't have private companies, whose primary goal is maximizing profit, behaving like sovereign judges passing down opinions that are binding for disinterested third parties," Straubhaar said.

EU makes efforts to curb the influence of the three big players

Over a year ago, the heads of the state and governments of the 27 European member states called upon the Union's executive body, the European Commission, to come forward with proposals on how to supervise credit rating agencies. The Commission then proposed to set up a a new European supervisory authority, the European Security Markets Authority (ESMA).


The European Commission set up a new supervisory body for
rating agencies.

ESMA started work on January 1, promising to compel rating agencies to disclose the methodology of their ratings. But so far, the power of the big rating agencies appears unfettered.

Apart from calling for closer supervision of the big rating agencies, many European politicians have supported the creation of a European ratings agency. An independent European rating agency was indispensable, Bavarian finance minister Georg Fahrenschon said.

But economists are not so sure such a European agency would change much. "We don't need rating agencies to tell us that Greece is on the verge of bankruptcy," said Thomas Straubhaar. "A European agency would not be able change anything about this fact, nor could it correct it."

And Torsten Hinrichs of Standard and Poor's told Deutsche Welle investors were already free to place their trust in a whole range of agencies.

So even if a European ratings agency was to come into existence, it would still have to establish itself on the market and gain investors' trust.

Author: Andrea Rönsberg
Editor: Nicole Goebel




S&P warning puts damper on Eurogroup plans

Deutsche Wellle, 5 July 2011

Standard & Poor's is critical of
the banks' plans
The Standard & Poor's rating agency says a debt rollover plan pushed by French banks would amount to a default, putting a damper on European efforts to solve the Greek debt crisis.

French banks last week thought up what they figured was a really good plan: a debt rollover plan under which some of the Greek bonds would be voluntarily renewed when they become due, but on different terms, giving Greece some breathing space without actually reducing the amount owed to creditors.

German banks, which together with French banks and insurance companies are among the major holders of Greek debt, agreed to the plan - and so did the German finance ministry.

But the ratings agency Standard & Poor's warned on Monday that this option "would likely amount to a default under our criteria." The other two major rating agencies, Fitch and Moody's, did not react immediately, but it was expected that they could well come to a similar assessment.

S&P warning calls into question second bailout package

Since German banks have made it clear that any solution to the Greek debt crisis which rating agencies viewed as a default was not viable, that would call into question the voluntary contribution of banks and insurance companies to a second bailout package designed to help Greece through to 2014.

Eurozone finance ministers put off
deciding on a second bailout package
to help Greece
At the weekend, the finance ministers of the 17 eurozone countries put off a decision about such a bailout, which is expected to amount to 80 to 90 billion euros ($116 to 131 billion) because of conflicts over the extent of private sector involvement in the effort.

The eurozone ministers did sign off an 8.7 billion euros loan to Greece which is part of an 110 billion euros package agreed upon last year. Without this loan, the Greek government would have faced insolvency within weeks. But without a second bailout deal, a funding shortfall is imminent between 2012 and 2014.

Criticism grows louder of rating agencies' power

With the controversy surrounding a second bailout package due to the assessment of Standard & Poor's, criticism of the big rating agencies' power is growing louder.

ECB member Ewald Nowotny is
one of the rating agencies' critics
European Central Bank policymaker Ewald Nowotny told Austrian public radio that the rating agencies were placing obstacles in the way of those banks willing to contribute to Greece's financial stabilization.

The Bavarian finance minister, Georg Fahrenschon of the conservative Christian Social Union party, or CSU, told the German newspaper Passauer Neue Presse that the warning issued by S&P was "inappropriate." And Joachim Poss, finance expert for the Social Democrats in the German Parliament, told Deutsche Welle that the game the US rating agencies were playing had to make one "uneasy."

The three major rating agencies hold a collective market share of roughly 95 percent. Their special status has been cemented by law - at first only in the US, but then in Europe as well.

"The ratings from the big three were declared mandatory for European firms active in the US market," Thomas Straubhaar, the director of the Hamburg Institute of International Economics told Deutsche Welle.

The agencies rate the creditworthiness of companies and countries, as well as the quality of funds and stocks. Their assessment determines the conditions under which firms, banks or countries may borrow money on the capital markets.

"We can't have private companies, whose primary goal is maximizing profit, behaving like sovereign judges passing down opinions that are binding for disinterested third parties," Straubhaar said.

EU makes efforts to curb the influence of the three big players

Over a year ago, the heads of the state and governments of the 27 European member states called upon the Union's executive body, the European Commission, to come forward with proposals on how to supervise credit rating agencies. The Commission then proposed to set up a a new European supervisory authority, the European Security Markets Authority (ESMA).


The European Commission set up a new supervisory body for
rating agencies.

ESMA started work on January 1, promising to compel rating agencies to disclose the methodology of their ratings. But so far, the power of the big rating agencies appears unfettered.

Apart from calling for closer supervision of the big rating agencies, many European politicians have supported the creation of a European ratings agency. An independent European rating agency was indispensable, Bavarian finance minister Georg Fahrenschon said.

But economists are not so sure such a European agency would change much. "We don't need rating agencies to tell us that Greece is on the verge of bankruptcy," said Thomas Straubhaar. "A European agency would not be able change anything about this fact, nor could it correct it."

And Torsten Hinrichs of Standard and Poor's told Deutsche Welle investors were already free to place their trust in a whole range of agencies.

So even if a European ratings agency was to come into existence, it would still have to establish itself on the market and gain investors' trust.

Author: Andrea Rönsberg
Editor: Nicole Goebel

Related Articles: