In that case... you don't know how any central bank works. 

First off.  Italy's central bank before the creation of the ECB worked was less what you call a "True Central Bank" then the Fed. 

Central banks NEVER loan money to governments.  They can't.

Central Banks are part of the government.  As an example, all the excess profits the US Federal Reserve makes (not a full federal bank mind you) goes to the US Treasury and Congress.  In a "Public" central bank.  This would be even more the case.

Additionally, by buying bond notes from banks, they are doing the governments a favor.  If the ECB paid out 100B to Italy.  Italy could pay out 100B in loans.  If the ECB buys 100B worth of bonds at a 30% yield.  Italy now owes them 130B, which the ECB will not collect.  Therefore reducing Italys debt burden by more.

The UK, Denmark and Sweeden stayed out of the eurozone because they realized that it's dumb to have one currency without one fiscal policy when your living with countries like Italy and Greece that run up huge deficits... and they don't want to be part of a stricter union.

Essentially your arguement isn't based on faulty opinions so much as a faulty premise to begin with.  Whoever has been telling you this stuff must of been making it up as they went along.  It reminds me of the Greek Protesters who think the politicians embezzled all their money.

Nothing in your wikipedia article actually backs up what you think it does.  For example under "Causes for the soverign debt crisis" the main cause they listed was countries like Italy and Greece using slick accounting tricks to hide the fact that they were spending more then their balance sheets said, and making less then they said.

Also, you don't really get to choose your credit rating agencies.

The ones used rely largely on who has the most cred.

The only ones with any real cred are the American ones currently.

I mean honestly, if you were going to blame them for anything. It's for not downgrading Greece and Italy faster to spur debt controlling moves sooner... and that's only if you believe it matters.

http://www.ritholtz.com/blog/2011/12/do-ratings-agencies-still-matter/

Note US bonds not being effected by downgrades.

I don't see how making the dominant ratings agencies dependent on the governments they're supposed to be downgrading helps. If they would of held off on downgraded Italy and Greece, all that would of happened is that the situation would of been even worse when it did explode and people would be even more slow moving to fix it.

The problem hasn't been France and Germany getting preferable treatment. It's that France and Germany let the periphery act spend like drunken sailors with flimsy paperwork and more or less vindicate those who stayed out of it.

Yep, probably I didn't understand how central banks work.

About rating agencies, I don't want ones dependent on government, but let me be sceptical about the neutrality of S&P, Moody, etc, thanks to their rating, banks were allowed to get rid of the Argentinian bonds they owned suggesting and selling them to their clients when they were already waste paper. About big American banks, it's natural that they do their own interest, but I don't think they are neutral when they choose against which nation they'll launch a destructive speculative attack.

About Italy, it's by no means in the same situation of Greece, we are plagued by bureausaurs and politicians that don't want to give up their own privileges and those of the groups and lobbies that bring them votes, but we still have some of the richest and most productive regions in Europe, and most people now are fed up and want to get rid of the rot, and elections would have been a good opportunity, but curiously (suspiciously?) Italy's creditors pushed our president to try to form, after Berlusconi's resignation, a new "technical" government to avoid elections. Also, Germany and France don't want italy to sink, as it's EU 4th economy and they need us, also to gather from us more than 100 of the 700 billion Euros needed for the new fund for stability. Finally, Germany strongly wanted Italy and Spain in the past, and now the new Eastern European members, in the Eurozone, because despite all the horrible flaws in our government's management of economy, our old weak currency emptied our pockets (but Euro does it too), but helped us a lot to compete with them. BTW we are also plagued by strong tax evasion, and right now, starting since gambling was legalized until some tricks were exposed, the state accumulated a 98 billion Euros credit, three times the last financial bill, with authorized gambling companies that cheated on the controls to pay less taxes, but for some reasons the credit's collection doesn't proceed.

Depends on your definition of nuetral.  The major ratings agencies treat all the countries the same but they are cautious when downgraded, waiting too long because they trade soley on their reputation.  Any bias or a wrong call would kill them. 

So they end up being reactionary.

When they downgrade a country it's because that country is already beggining to collapse economically.

This can be seen by the fact that France STILL hasn't been downgraded, when it really should have...and the countries that HAVE been downgraded should of been downgraded a while ago.

As for having productive areas... you could be making 300,000 a year, but if your ranking up 360,000 a year in debt overtop the 300,000 your making... it doesn't matter.

About neutrality: the biggest rating agencies are private companies owned by big American groups, I can't see them sinking USA even if they were given the opportunity, as the disaster would risk destroying them too, while, besides being outside of America, it's easier to sink a EU country at a time, because our Union isn't a true, full Union like USA, not to mention that rescue attempts by the other EU countries are predictable, probably more than similar attempts made by USA to protect themselves, due to EU inflexible rules and stubborn will to keep official inflation low even when it's totally unrealistic, and a speculation can be made also exploiting them. Those same EU rules also limit the ways the attacked country can defend itself.

About productivity, the last financial bill written by Monti is almost all about new or increased taxes and very depressive, but in general Italian real life economy is bigger than our debt, but there's a lot of tax evasion and honest taxpayers bear the burden of too many useless costs: at parity of nominal tax pressure with many other states, our state gets its money from a number of taxes in the hundreds instead of in the tens like sensibly ruled countries, this has very bad side-effects, increased costs and loss of time for both state and taxpayers, and clogging tax offices with an abnormal mass of papers that steal precious time that could instead be used to dig out a lot more tax evaders. Up until now, no minister of Economy managed to simplify our tax system, there's a hidden cross-party lobby that always thwart every attempts (this happens also to every attempt to simplify our legal system in general, that's plagued too by an abnormal number of laws).

Outside you know... the fact that S&P did downgrade the US.  You seem to not really get ratings agencies.  They don't "sink" anyone.  I'd suggest looking into how ratings agencies work and what they do.

They've done everything they could to AVOID sinking europeon countries.  The general complant about CRA's is they don't downgrade fast enough.

To complain that they're downgraded too early is ridiculious.

As for the US vs Europe.   France has a higher credit rating then the US.  Compare French bond yields with US bond yields... and you'll see either the US has been downgraded to hastily or France hasn't been downgraded quicly enough.

As for tax evasion... I don't really see your point.  It sucks and should be stopped, but it doesn't change the fact that the problem lies soley within Italy and does not change the fact that Italians have been irresponsibly running up huge debts above what they were bringing in revenue wise.

1. I made a horrible mess between big merchant banks and rating agencies, practically mixing them up! I know the attacks are made by big banks and big hedge funds: neutrality of rating agencies could come into play indirectly, American financial giants could be helped more by rating agencies when their attacks don't damage America directly or the overall American economy indirectly, this can be made in legally acceptable or borderline ways, that can include the wording that explain a downgrade, or its timing, and many other subtleties. In the Argentinian case, the delays damaged both Argentina itself and savers, while benefitted just banks that could get rid of poisonous bonds selling them to their clients. While about other cases it can just by a suspicion of mine, what happened in the Argentinian bonds scandal is well documented, the delay in the downgrade benefitted the banks and the funds and heavily damaged savers, and many banks have been found guilty of having hid to their clients what they already had known for many months about the imminent default. And I didn't complain they downgraded too early, they should downgrade at the right time, so governments couldn't stick their heads in the sand too long, until it's too late. But there's always a problem, downgrading can cause a harmful closed loop feedback, as it makes the interest rate on the debt rise, and this on its turn can make the rating furtherly drop, in a vicious circle.

2. My point is that the whole economy, including the submerged one, is taken by some analysts into account when evaluating the health of a country, one thing is if there's no more wealth to be taxed, a very different one is when there is a lot of hidden wealth that the state isn't able to find and tax, yet, but it could, particularly if cornered and forced to seriously try and do it. And yes, it's our responsibility to remedy to this latter situation.

Banks only lose out when countries fail though.

I mean, where have banks made money with Greece and Italys failure.  Stock Prices everywhere are down, the banks that own their bonds have to take massive cuts and lose money on the bonds..... if bank failures happen, most banks everywhere will lose some money...

This is true, but even more reason for American banks to avoid attacking America too hard and for American rating agencies to avoid helping, willing or inadvertently, hedge investors in such attacks. Also, some big banks and funds actually attack whole states and their bonds, I guess they prepare in advance their portfolios to maximize profits and minimize losses from the operations, because they wouldn't shoot themselves in the foot, and they obviously don't care if others lose from them.

BTW I found the origin of the latest criticism against the ECB: it's going to help banks with a giant loan of more than 480 billion Euros at a ridiculous 1% interest rate, that's considered poking fun at averyone else, from states to private citizens, that are strangled by interests far higher when they borrow money, particularly from the banks. Almost everybody is sure that banks will keep on charging very high interests on loans, blaming the stuation, despite this big loan they received, that at such a low interest rate is almost a gift, no, actually IT IS a gift, because the profits they'll make lending that money is far higher than if they had to collect it elsewhere, while ECB will lose from the loan, as the interest rate is lower than inflation rate. Rescuing the banks was maybe necessary, but charging an interest equal to inflation rate, not lower, would have already been a help big enough, and already more than what anybody else, including states in trouble, could hope for.

http://www.globaltvbc.com/money/ecb+lends+europes+banks+a+massive+%E2%82%AC489+billion+over+unprecedented+3-year+period/6442546373/story.html

http://www.thehawkeye.com/story/BC-EU--Europe-Financial-Crisis-7th-Ld-Writethru

In one or both articles, there's also the origin of my first misunderstanding: some economists suggest ECB become the lender of last resort to European governments, while the ECB president opposes the idea.

Instead, a EU separate 700 billion Euros fund, the ESM, will be raised as lender of last resort, and Italy must contribute with more than 120 billions. But many are deeply worried by some excessive powers this fund will have: http://en.wikipedia.org/wiki/European_Stability_Mechanism#Critics

Banks do not attack countries at all.  Not sure where your getting that from.

This is a global economy we're talking about here.

As for the ECB not wanting to be a lender of last resort to Europeon governmets.  It's not that Draghi doesn't want to be that.  It's that they CAN'T be that as that is not within the the ECB's charter.  They don't have the authority to do so. 

Mainly because Germany didn't want the ECB to become a credit account that irresponsible countries could run up without having to get money through political decisions.

As for the 1% rate being too low... I'm not reading anyone upset with that interest rate, and if you read your source you'll note the rate before that was 1.5%.

The money is being loaned to banks, because banks don't want to loan money to each other because of eurodebt contagin.  That money is then lent to other people.   Charging a higher interst rate would mean the banks would have to charge you a higher interest rate.

The money is being lent specifically so it can be lent out to others at a higher rate so the credit market doesn't freeze up.