With this rating agency gag order, any sovereign bond banned from being rated holds a C

It seems like the EU and their spendthrift member states are going to put a general gag order on any ratings agency that rates sovereign bonds from EU countries, for the general good, of course:

The new measures would empower ESMA, the European market watchdog, to ban the publication of ''sovereign ratings in existing situations of risk for the orderly functioning of the financial markets or for the financial stability of the whole or part of the EU's financial system''.

This basically means they can ban the publications for ratings for any country which does not hold at least an AAA rating like Germany. And there's a 100% guarantee this power will be used all the time, as long as the BF-PIIGS cannot lower their debt level sustantially:

The power to limit the issuing of ratings may only be exercised in ''exceptional circumstances,'' that are to be spelled out by a delegated commission.

These 'exceptional circumstances' are going to be defined as any country which does not have an AAA rating, or more than 80% of it's GDP in sovereign debt. Since this involves about the whole EU, apart from Germany, the Netherlands and Finland, the state of gag order will be a permanent fixture.

Which basically means that with this measure, the EMSA has just issued the rating of 'C' for any such countries that are verboten to be rated, due to "risk for the orderly functioning of the financial markets or for the financial stability".

This measure is not going to help, but just to aggravate the situation as the markets, due to the fact that lots of sovereign bonds cannot be rated anymore, will not be bought anymore, except by the ECB, which basically prints money to buy them, thus monetizing debt, thus leading to inflation. And with inflation, the debt will be less.

Maybe this is the true aim of this measure.