Here is a nice short piece by Martin Feldstein explaining the error in the argument made by some French politicians – including the head of the French central bank — that UK sovereign debt should be downgraded before French sovereign debt. In short, it seems they do not understand what it means to be in a monetary union. The piece could emphasize more that while France is at a greater danger of default, inflation is also a pernicious destroyer of investor returns on debt, just not one covered by bond ratings.
The Effects of Being in the Eurozone on the Rating of Sovereign Debt
January 12, 2012 by Jonathan Parker
“Britain … has its own currency, which means that there is no risk that Britain will default on its debt”
This argument makes perfect sense to me. Only problem is that I remember thinking the same thing about USA just before S&P lowered its credit rating.