European Commission chief Jose Manuel Barroso has ruled out creating a Brussels-backed public ratings agency to rival established credit firms following a series of downgrades of euro zone countries' debt.
The Portuguese politician said there were questions over the role of ratings agencies in the lead-up to the global financial crisis, but dismissed suggestions the EU should set up its own assessor.
"We have no intention to create any kind of public ratings agency," Barroso told a lunch function in Sydney.
EU leaders and officials have been highly critical of the agencies who have progressively downgraded weaker euro zone members as the debt crisis has deepened, accusing them of worsening the situation.
European Central Bank executive Jose Manuel Gonzalez-Paramo last month accused the major agencies of "flagrant conflicts of interest", saying it was "possible and desirable" to increase competition in the industry.
The comments followed Standard & Poor's unprecedented downgrade of the United States from its top-flight triple-A rating by one notch to AA+, saying its politicians were increasingly unable to manage the country's huge debt.
Rumours flared of a French credit downgrade over Europe's debt crisis, which started in Greece and is now fuelled by fears Spain or Italy might default, sparking a break up of the 17-nation currency.
Investors are questioning whether France and Germany, the euro zone's two largest economies, can continue to underwrite other states' debts without losing their top credit ratings and falling victim to the crisis themselves.
While the agencies are now criticised for their eagerness to downgrade, they faced earlier derision for giving AAA ratings to mortgage-backed securities in the US that later went sour and led to the global financial crisis.
Meanwhile, France says it is seeking a co-ordinated response to the current economic and debt worries at a meeting of G7 finance chiefs on Friday.
Finance Minister Francois Baroin told parliament France would be looking for a response from Group of Seven finance ministers and central bank chiefs that was "co-ordinated, but adapted to the economic and budgetary situation" of each country.
Greek borrowing costs hit new record
Greece's borrowing costs reached a new record high today on fears about the country's austerity programme, a new blow as Prime Minister George Papandreou chaired a cabinet meeting aimed at finding ways to speed up delayed structural reforms.
The interest rate on Greek 10-year government bonds was about 20% - some 18 percentage points above the rate for the benchmark German bonds of the same maturity.
The borrowing rates of troubled fellow euro zone countries Italy and Spain also came under pressure today.
Extravagant borrowing costs forced Greece out of international bond markets last year, and the country now relies on international loans to keep solvent.
However, Athens still holds short-term debt auctions and was able to raise €1.3 billion today in an auction of 26-week treasury bills at a slightly lower interest rate than a similar sale last month. The debt management agency said the auction was three times oversubscribed and resulted in a yield of 4.8%.
A government official said Papandreou discussed needed structural reforms during a phone call with European Council President Herman Van Rompuy.
A new batch of measures adopted by Parliament in June included further cuts in the public sector's size and cost, closures and mergers of state enterprises and an ambitious plan to sell €50 billion in state assets by 2015. But there has been little noticeable progress, while previously decided reforms such as the opening of tightly regulated professions, are still lagging.
After living beyond its means for years and piling up a mountain of debt in the process, Greece just avoided bankruptcy last year through a €110 billion rescue loan package from its European Union partners and the International Monetary Fund.
The realisation that even that would not be enough amid a shrinking economy and a malfunctioning state revenue collection system resulted in a second bailout in July, worth an extra €109 billion.
Continued release of the vital funds - any substantial delay could force Greece to default on its debts - depends on the government's progress with reforms and deficit-cutting measures.
But talks with EU and IMF inspectors were unexpectedly suspended last week for 10 days, to let Greece complete what the EU said was ''technical work, among other things, related to the 2012 budget and growth-enhancing structural reforms.''
The government official was optimistic today that there will be no hitch with rescue loan payments. ''We do not believe there is an issue with the sixth installment' worth €8 billion'', he said.
