Fitch, Standard and Poor's and Moody's have faced mounting criticism from senior EU officials over their ratings actions in the troubled 27-nation group. EU officials blamed negative ratings for precipitating the crisis in Greece last year.
Last week Moody's changed its outlook for Germany's AAA credit rating to negative, the first step toward a possible downgrade. German officials angrily dismissed the assessment.
In Brussels feelings against the ratings agencies are more fraught and have also given rise to anti-U.S. sentiment and suggestions the American are out to "get" the eurozone because of the euro's perceived role in opposition to the dollar.
The Netherlands and Luxembourg -- both AAA-rated economies -- were also put on negative watch by Moody's, amid hints that other EU members may face similar action before potential downgrades.
Earlier this year, Moody's put France and Austria's AAA ratings on negative outlook. As more downgrades loom, Moody's said risks that Greece would leave the eurozone had increased and posed a threat to other EU economies.
Nine eurozone countries were downgraded by Standard and Poor's earlier this year.
The downgrades gave impetus to EU calls to regulate the ratings and call them to account for the ratings they issue.
The debate also played into the hands of conservatives who branded the ratings agencies as part of an "Anglo-American conspiracy" against the eurozone. EU analysts admit that U.S. banks have a lot to lose in a eurozone meltdown.
Draft legislation to regulate credit rating agencies and reduce reliance on their ratings is under consideration in European Parliament.
The lawmakers say they want to ensure that the legislation injects more responsibility, transparency and independence into credit rating activities, and helps to enhance the quality of the ratings to protect investors.
"The debt crisis in the eurozone has shown that credit rating agencies have gained too much influence, to the point of being able to influence the political agenda. In response we have strengthened rules on sovereign debt ratings and conflicts of interest," said Italian member Leonardo Domenici.
Since sovereign debt ratings affect the credibility of states, and hence their borrowing costs, lawmakers see a need to regulate their quality, timing and frequency. These ratings should reflect each country's specific characteristics, and should in no way advocate policy changes, they add.
Amendments to the bill require each agency to prepare and publish an annual timetable of dates for publishing its sovereign ratings, so as to give states time to prepare for them.
The timetable would have to comply with the general rule that sovereign credit ratings may be published only after close of business in all trading venues established in the European Union and at least 1 hour before they reopen.
Overall, however, the European lawmakers want to reduce over-reliance on ratings. All regulated financial institutions, such as banks, insurance companies and investment fund managers, would be required to develop their own rating capacities, to enable them to prepare their own risk assessments and thus not rely entirely on external ones.
No EU law would be permitted to refer to credit rating for regulatory purposes, and regulated financial institutions would not be permitted to sell assets automatically in the event of a downgrade.
The ratings agencies would be required to ensure that their ratings are impartial, say the lawmakers. They could be held liable for their ratings in civil law so that an investor whose interests were harmed when buying or selling a rated instrument could sue the rating agency if it could be shown that it had made methodological mistakes or committed other infringements.
The lawmakers have also proposed tough new guidelines for eliminating conflicts of interest between the owners and clients of ratings agencies.
A major question not answered is how the European Union will make the U.S. ratings agencies conform to its regulatory regime, whenever it takes effect.
2014: The Year in Fashion [PHOTOS]