After Standard & Poor's downgrade of nine European countries' credit ratings on Friday, it seemed only a matter of time before the European Financial Stability Facility, the fund set up to bail out struggling European nations, lost its triple-A rating too. Now it has.

The EFSF, which has funded rescue packages for Greece, Ireland, and Portugal over the past two years, owed its healthy rating to guarantees from its sponsoring nations. But two of those, France and Austria, are now bereft of their triple-A status. So borrowing in the international bond markets will become more expensive for them and, by extension, for the EFSF.

Luxembourg's prime minister, Jean-Claude Juncker, who leads euro-area finance ministers, was quick to insist the EFSF “will continue to be backed by unconditional and irrevocable guarantees by euro-area member states”. Other countries, such as the UK, have not ruled out contributing more to the fund. Strong German confidence figures and a sale of Spanish bonds today further softened the bad news.

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But the timing piles extra pressure on Greece, which is once again in deadlocked crisis talks about how it is going to pay its debts. And Italy's Mario Monti has pleaded with Germany and other strong economies to do more to help bring the price of borrowing down, warning of a "powerful backlash" among voters if they do not act.

In France, meanwhile, the news is grist to the mill of the far right. Ahead of the May elections, the Front National's Marine Le Pen has used the financial market turmoil to stoke fear and anger amongst voters. This latest news will only lend force to her claim that the French are "debt slaves" – and it's an opportunity she has already seized upon.

Aditya Chakrabortty, writing in the Guardian, persuasively poses one of the most logical questions arising from all of this: why do the credit ratings agencies have such power?

The agencies have as much foresight as Mr Magoo. In my working life, the credit-rating duopoly has failed to warn investors about the Asian financial crisis, Enron, the subprime crisis, Lehman Brothers – and Greece. My particular favourite, Moody's report dates from December 2009 and is titled "Investor fears over Greek government liquidity misplaced". Six months later, Athens received a $147bn rescue package...

And his proposed solution is intriguing:

So, the agencies are neither accurate nor merely observers – yet they bully governments around the world and make billions doing so. The obvious solution would be to take this public service into public hands. Let's have a ratings agency run by the UN, funded by pooled contributions from both lenders and borrowers. It should be the only one to have preferential access to data from corporates and countries. Let's make the ratings business a utility, rather than a semi-cartel that intimidates elected politicians and rakes in excess profits. It's time to break up the bullying double-act.

Read the rest of Chakrabortty's call to action on the ratings agencies...