Warning: Trans-Atlantic Tensions Ahead

There’s been a small, but sharp, undercurrent of trans-Atlantic tension in this week’s coverage of the Greek debt crisis. Judging by reporting in Europe and the U.S., it looks like a theme that’s only going to intensify.

This rift-in-the-making has two sources: European regulators who say they were done wrong by the U.S. ratings agencies, and U.S. lawmakers who want no part of the IMF’s $40 billion loan to Greece. On their own, each is a rich vein for the business press. Taken together, they could set the tone for coverage of the Greek crisis and its aftermath, here and there.

A central player in this tale is Michel Barnier, the European Union’s financial services commissioner, who hits New York and Washington next week for high-level meetings about financial regulation. The Wall Street Journal has a nice preview of his trip and an outline of his agenda.

While there’s a lot on his plate, Barnier made clear this week just how frustrated he was with U.S.-based ratings agencies. As The New York Times reported,

“There are not enough ratings agencies, not enough competition and not enough diversity,” he said. “Why should there not be an agency that is more European than those that exist today?”

A decision by Standard & Poor’s, also based in the United States, to downgrade Greece’s debt to junk status last month enraged European officials, who questioned whether the ratings agencies were accurately assessing how likely it was that countries in the euro zone would default on their sovereign debts.

Barnier isn’t alone. Jose Manuel Barroso, president of the European Commission, struck a similar tone. “Deficiencies in their working methods has led to ratings being too cyclical, too reliant on the general market mood rather than on fundamentals - regardless of whether market mood is too optimistic or too pessimistic,” Barroso told lawmakers in the European parliament on Wednesday, according to a Reuters report.

The FT’s Brussels blog pointed to a late-April report from Germany, where the foreign minister called for the creation of a European ratings agency.

The foreign minister criticized private US agencies that do not only develop and distribute financial products, but evaluate them too.

In this situation, Westerwelle said, “conflicts of interest are guaranteed.”

So, that’s why they’re mad at us. Maybe we should be more mad about that, too.

On a parallel track, some conservatives are gearing up for a fight about the US portion of that IMF loan.

As The Hill reported on Wednesday, House Republicans, led by Rep. Cathy McMorris Rodgers (R-Wash.), vice chairwoman of the Republican Conference, wrote to Treasury Secretary Timothy Geithner, urging him to keep the U.S. out of the Greek loan.

“The United States is one of the largest contributors to the IMF and in this agreement it means more taxpayer dollars being spent to help bail out [a] European country,” she said, adding: “I really question whether or not we should be now spending U.S. taxpayers to bail out countries like Greece, and there’s other European countries that may follow.”

She stuck with that argument even after the stock market’s messy Thursday, arguing that “[t]he market downturn supports the argument of bailout opponents that investors don’t have confidence that the Greek bailout deal will work.”

The Heritage Foundation published some handy talking points for pols with this perspective, and National Review jumped on the bandwagon.

The bailout of debt-ridden Greece has now morphed into the ongoing saga of our own government’s penchant to bail out any and every well-connected entity with an extended hand.

So did RedState.com, in prose so angry you can almost hear it being spoken on the radio. “Is Spain next in line for an IMF Bailout partially funded by you, the American taxpayer?”

Salon’s Andrew Leonard provided a forceful rebuttal to the conservative stance.

McMorris Rodgers and the rest of the House Republicans may be guilty of a severe misreading of what’s truly at stake. The euro is not plunging in value, along with stock markets across the world, because investors are upset at the prospect of a Greek bailout. What terrifies them is a rerun of the recent financial crisis with Greece playing the role of Lehman Bros. “Contagion” is the nightmare of the day — the possibility that Grecian instability will lead to sovereign debt crises, bank runs, and a new global economic slump that undoes whatever faltering progress has been made recovering from the Great Recession. That’s the real gathering storm and it is freaking out everybody who is paying attention.

There are some real policy questions here, and in the ratings agency rage, that readers need to understand. This is one of those times where fact-gathering should lead and opinion should follow, not the other way around.

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Holly Yeager is CJR's Peterson Fellow, covering fiscal and economic policy. She is based in Washington and reachable at holly.yeager@gmail.com.