So Standard & Poor has downgraded the credit rating of half the Eurozone. This is not a surprise as it was flagged up a long way before Christmas.
But there are two surprises in all this. The first is that we still pay any attention to the credit ratings agencies. After all, they managed to give triple A ratings to securitised sub-prime mortgages that caused the 2008 credit crunch and near collapse of the financial system. Their subsequent response seems to have been a giggle and cry of 'whoops'. Sadly, it seems that Obama's plans to sue the pants off them ran into the sand.
But the second surprise is that buried in S&P's statement is reference to the fact that austerity by itself will not get the Eurozone out of the crisis it is in. Well, derr...! They have been calling for austerity to reduce government deficits to maintain low real interest rates and market confidence. And now they have recognised that by itself austerity just adds to deficits and keeps economies bumping along the edge of recession. We should all rejoice at such Damascene conversions!
Perhaps we can look forward to the agencies starting to give triple A ratings only to governments that use their deficits to stimulate growth.