Rating agencies rated some of the Credit instruments that have incorporated sub-prime assets and their derivative assets as investment worthy. Investors flocked in and when the sub-prime housing defaults erupted, we had a massive financial crisis. Consequently G20 took extra-ordinary measures and tried to restore trust and confidence in markets. Situation appeared to have gotten better until the Greece debt matter hit the market. Of-course there are many reasons that were internal matters to Greece and EU that could explain why we find ourselves in such situation. Around the same time, the rating agencies complicated the situation b downgrading sovereign rating of the nations with higher debts. Some of these debts are a consequence of the financial crises, macro-economic slowdown and the the nations’ own fiscal mismanagement. States have to issue debt not only to stimulate growth but also to secure some of the large financial institutions. That debt’s service in the light of slow down (and due to this additional burden) is to be considered different from the regular debt service capability with respect to GDP growth and / or cash (including Forex and Gold reserves) etc as well as future financing requirements. However the recent revision of some sovereign states' rating shows that the agencies never gave an allowance for extra financial risk that nation states were obligated to take in dealing with extra-ordinary situations. That way the rating agencies are only complicating the situation.

The review of sovereign rating of Portugal, Ireland, Italy, Greece and Spain almost threatened the EURO. The rating downgrade made debt expensive for PIIGS forcing them to seek internal (ECB & Euro Zone) help. That situation ringed alarm bells among other EU Economies that if they help a bail out they may also have of face similar debt crisis in future. So those states resisted bail out and of-course finally responded. But chose to follow austerity based domestic economic policy. That means people who are capable of spending chose not to spend while the others cannot spend. That obviously has a telling effect on the recovery. On the other hand the austerity ensured good health of these states whereby the Euro zone interest rate changes were constrained and hence the value of Euro Vis e Vis USD or other currencies is raising. After all some Non-EU states are still taking steps to sustain recovery. That obviously cannot be good for Euro Zone. Chinese and other states imported goods from Europe to expand capacities. But that trend may not continue if the global recovery is not certain. These additional capacities will but of-course idle and only ensure expansion of nonperforming assets for financial institutions in respected countries. So yes, there are many players who contributed to the crises of recent times and rating agencies have only facilitated at every level.