Ratings Agencies' Speaking Ban

Given my question from last week, and questions raised by Eugene Volokh and Kenneth Anderson elsewhere, I should probably look into this story myself. The original Financial Times Deutschland story explained:

EU-Binnenmarktkommissar Michel Barnier will es Ratingagenturen notfalls verbieten, Urteile über kriselnde EU-Länder zu veröffentlichen. In einem vertraulichen Vorabentwurf für eine Reform des Gesetzes zu den Ratingagenturen schlägt Barnier vor, dass die neue Wertpapieraufsicht ESMA das Recht erhält, die Veröffentlichung von Einschätzungen über die Zahlungsfähigkeit "vorübergehend zu untersagen". Der Entwurf liegt der FTD vor.

Der Kommission geht es um Staaten, die über Finanzhilfen verhandeln - etwa Gelder aus dem EU-Rettungstopf EFSF oder vom Internationalen Währungsfonds (IWF). Ein Verbot könne verhindern, dass ein Rating in einem "unangebrachten Moment" kommt, "mit negativen Folgen für die Finanzstabilität des Staates und möglichen destabilisierenden Effekten auf die Weltwirtschaft", heißt es im Entwurf.

Spiegel Online has the English version of the story:

European Internal Market Commissioner Michel Barnier is considering a move to ban the agencies from publishing outlook reports on EU countries entangled in a crisis, according to a report in Thursday's issue of the Financial Times Deutschland newspaper.

In an internal draft of a reform to an EU law applying to ratings agencies obtained by the paper, Barnier proposes providing the new EU securities authority, the European Securities and Markets Authority (ESMA), with the right to "temporarily prohibit" the publication of forecasts of a country's liquidity.

The European Commission is particularly concerned about countries that are negotiating financial aid -- for example from the euro rescue backstop fund, the European Financial Stability Facility (EFSF), or the International Monetary Fund (IMF). A ban could prevent a rating from coming at an "inopportune moment" and having "negative consequences for the financial stability of a country and a possible destabilizing effect on the global economy," the draft states.

Now I hope very much that such a thing would be illegal under the European Convention for Human Rights, but I'm less than entirely convinced. Let's look at some relevant precedents, bearing in mind that I don't see how the ban could be struck down on proportionality grounds:

• Casado Coca v. Spain, 26 January 1994: A Spanish ban on professional advertising for attorneys upheld. The Court holds that "rights of others" is a sufficient justification.
• VgT Verein gegen Tierfabriken v. Switzerland, 28 June 2001: A Swiss blanket ban on political advertising on TV is held to be in violation of the Convention. The Court holds that the "rights of others" are an appropriate justification.
  
• Stambuk v. Germany, 17 October 2002: A fine on a German ophthalmologist for violating the advertising ban struck down on the grounds that the penalty was disproportionate. The Court approved of the aims of "rights of others" and "public health".
• Murphy v. Ireland, 10 July 2003: An Irish ban on religious advertising on TV and Radio is upheld. The Court holds that "rights of others" and "public order and safety" are sufficient justification.
• TV Vest As & Rogaland Pensjonistparti v. Norway, 11 December 2008: A Norwegian blanket ban on political advertising on TV is held to be in violation of the Convention. The disagreement did not concern the appropriateness of the "rights of others" justification, but only the proportionality question.

Preliminary conclusion: the justification is almost never the problem. Instead, the Court will normally look at the case most critically under the heading of "necessary in a democratic society". In my estimation, it is almost unthinkable that the Court would interfere with a law in an area so obscure (to them) and non-political (to them) as ratings agencies, at least not under this proportionality analysis. After all, this law is necessary to stop the heavens from falling down on us...