1As Member States struggle to retain the investment grades necessary to allow them to finance their governmental operations at a reasonable cost, credit rating agencies (CRAs) have been blamed for exacerbating a procyclical bias which only makes this task more difficult. How CRAs contribute to the constitution of the politics of limits underpinning the European sovereign debt crisis is at the core of this article. As a socio-technical device of control, sovereign ratings are an 'illocutionary' statement about budgetary health, which promotes an artificial fiscal normality. Subsequently, these austere politics of creditworthiness have 'perlocutionary' effects, which seek to censure political discretion through normalizing risk techniques aligned with the self-systemic, and thereby selfregulating, logic of Anglo-American versions of capitalism. The ensuing antagonistic relationship between the programmatic/expertise and operational/politics dimensions of fiscal governance leaves Europe vulnerable to crisis and the renegotiation of how the 'political' is established in the economy.New regulatory technical standards (RTS) can exacerbated the performative effects on CRAs, investors and Member States.
Analysing the European Union's regulatory response in the wake of the credit and sovereign debt crises, this paper argues how its adoption of risk management as the core strategy for governing the credit ratings space may undermine European efforts to rebalance the growing asymmetry between private expertise and public democracy. While centralised oversight, enhanced transparency and restorative, technical intervention seem like sound regulatory initiatives, I problematise the methodologies, models and assumptions of sovereign ratings to show how the new ratings framework may actually impede the ability of the technocratic European Securities and Markets Authority (ESMA) to redress the most egregious deficiencies of ratings. Drawing on the performativity of market relations, the paper argues how ESMA's supervisory conflicts undermine the EU's capacity to perform an alternative political economy of limits. Neither is it democratically sanctioned to interfere in the analytical substance of ratings nor should it distort the social facticity of creditworthiness by relying primarily on quantitative risk analysis, ESMA will be forced to either repoliticise the ratings process or promote the status quo, which diminishes fiscal sovereignty.
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