Portugal’s Attorney General announced Tuesday that a criminal inquiry was filed against the international credit-rating agencies — Moddy’s Investors, Standard & Poors Corp., and Fitch Ratings. The complaint claims the three international rating agencies have caused severe financial losses to Portugal and demands to know whether they are profiting from the ratings and if competition rules are being broken.
In a recent interview for Eurnews former President of Portugal, Mário Soares, accused the international rating agencies of being “illegal.” He said, “The ratings agencies are illegal, they make no sense, they have no sense of responsibility. How can they judge member states: with what right, with what authority? Where do they come from, who do they serve? We need to change all that.”
With huge debts and a declining economy, Portugal has agreed to a three-year 78 billion-euro (US$116 billion) bailout with the European Union and the International Monetary Fund.
According to the latest projections from the International Monetary Fund (IMF) the Portuguese economy is expected to contract to about 1.5 percent in 2011 and 0.5 percent in 2012.
The IMF also projected that unemployment in Portugal would reach 11.9 percent this year and 12.4 percent in 2012, as compared to 11 percent in 2010. The current unemployment rate in Portugal is 11.2 with an estimated 610,000 out of work.