Spain's top criminal court has dismissed a complaint filed against ratings agencies Fitch, Moodys and Standard & Poors, arguing their downgrades of the country's credit rating were not a crime. The complaint filed in February by the tiny United Left party and two social justice groups, ATTAC and the Observatory for the Compliance for Human Rights, accused the agencies of manipulating markets for their own gain.
It argued that the ratings agencies "manipulate and generate situations, contravening the law, to obtain profits either directly and indirectly". But High Court Judge Ismael Moreno, in a ruling dated August 30 but released on Friday, rejected the complaint, saying "it was based on the criminalisation of the activity which the ratings agencies carry out".
The judge said that while the downgrade of Spain's debt ratings by the agencies "had negative consequences for Spanish public coffers", from a legal standpoint there is no evidence that the downgrades were based on "false data". "At any rate, even if you admit that the ratings agencies were seriously mistaken, there was a generalised failure on the part of politicians, regulatory agencies, economists, analysts and other experts at the global level in anticipating the crisis, and above all, its extraordinary magnitude." Since the ratings agencies cut its credit rating between 2009 and 2010, Spain has had to pay higher interest rates to convince investors to keep buying its debt.
The Spanish economy slumped into recession during the second half of 2008 as the global financial meltdown compounded the collapse of a property bubble. It stabilised in 2010 but growth remains anaemic. Economic output grew 0.2 percent in the second quarter from the previous three months, after a 0.3-percent expansion in the first quarter.