In 2001, Japan defied the ratings agencies who had downgraded their sovereign debt. They refused to alter their fiscal commitments despite constant pressure to cut the deficit. Given that countries such as Greece and Portugal are unlikely to be expelled from the EMU if they continue to exceed the Stability and Growth Pact conditions, they should similarly resist the demands of the ratings agencies for increased fiscal austerity and thus spread their fiscal adjustment over a longer period which would inflict less damage on their nations.
Answer: False
Please see The bullies and the bullied for further discussion and/or post a comment.