ATHENS, Greece (AP) — On Saturday, Greece’s center-right administration expressed its satisfaction with Moody’s credit rating upgrade, marking the end of a 15-year period of junk status for government bonds that began during a profound debt crisis.
“This upgrade signifies the conclusion of a significant chapter for the Greek economy and confirms the nation’s return to European normalcy,” stated Finance Minister Kostis Hatzidakis, calling the development “a victory for not just the government, but for all Greeks.”
Late Friday, Moody’s announced the upgrade from Ba1 to Baa3, noting that public finances “have improved more rapidly than expected” as a crucial factor in its decision.
The agency praised the government’s policy direction, institutional advancements, and stable political climate, projecting that Greece will “continue to generate substantial primary surpluses, which will gradually alleviate its high debt levels.”
While ratings agencies started reinstating Greece’s investment grade status in late 2023, the government welcomed the good news amidst ongoing strikes and protests over its management of a tragic rail incident from two years ago.
Hatzidakis made his comments just hours before transferring his duties to Cabinet colleague Kyriakos Pierrakakis during a swearing-in ceremony that took place later Saturday, following the government’s announcement of a cabinet reshuffle.
“The upgrade by Moody’s to Baa3 represents the final milestone in achieving investment grade from all major rating agencies, showcasing Greece’s substantial advancements,” Prime Minister Kyriakos Mitsotakis shared in a post online on Saturday.
“We remain entirely dedicated to reforms that will attract investment, generate employment, and foster sustainable growth,” he added.
Greece fell into a financial crisis in 2010 and was compelled to accept three international bailouts to avert bankruptcy and address its public finances through strenuous austerity measures imposed by EU lenders and the International Monetary Fund.
The national debt as a share of gross domestic product reached a peak of over 200% in 2020 but has since been on a steady decline, with expectations to fall below 150% this year, according to forecasts from the Greek central bank.
Moody’s commended the government’s continuous efforts in reducing debt.
“For several years, Greek public finances have exceeded our baseline expectations, increasing our confidence that Greek debt will remain on a consistent downward trajectory,” the agency stated.
“These advancements are attributed to both ongoing expenditure control and rapidly increasing tax revenues, thanks to continued improvements in tax compliance and collection.”
