ATHENS, Greece — Greece’s center-right government expressed satisfaction on Saturday following Moody’s decision to upgrade its credit rating, removing the junk status that has hung over Greek government bonds for 15 years since the intense debt crisis.
Finance Minister Kostis Hatzidakis hailed the upgrade, emphasizing that it symbolizes a significant milestone for the Greek economy’s reintegration into European normalcy. He regarded this achievement as a collective success not just for the government, but for the Greek populace as a whole.
Moody’s had elevated Greece’s credit rating from Ba1 to Baa3 late Friday, attributing the move to the improvement in public finances occurring more rapidly than anticipated.
The ratings agency noted the government’s policy strategies, improvements in institutional frameworks, and a stable political environment, and projected that Greece would continue to run substantial primary surpluses, effectively decreasing its substantial debt burden.
Despite the gradual restoration of Greece’s investment grade status by ratings agencies in late 2023, the announcement brought much-needed relief to a government grappling with criticisms over its handling of a tragic rail accident that occurred two years prior.
These remarks were made by Hatzidakis before he transitioned his responsibilities to Kyriakos Pierrakakis during a swearing-in ceremony on Saturday, following a government reshuffle.
Prime Minister Kyriakos Mitsotakis acknowledged Moody’s upgrade in an online post, remarking that the Baa3 rating is the final step needed to reinstate Greece’s investment grade across all major ratings agencies and underscores the nation’s noteworthy progress.
Mitsotakis reiterated his administration’s commitment to reforms that aim to attract investment, generate employment, and promote sustainable economic growth.
Greece was thrust into a major crisis in 2010, ultimately relying on three international bailouts to stave off default and stabilize its financial systems through severe austerity measures imposed by the European Union lenders and the International Monetary Fund.
The nation’s debt-to-GDP ratio peaked above 200% in 2020 but has been on a decline since and is projected to fall below 150% this year, based on forecasts from the Greek central bank.
Moody’s commended the Greek government for its persistent efforts in reducing debt. “Over several years, Greek public finances have exceeded our baseline expectations, strengthening our confidence in the sustained downward trajectory of Greek debt,” it noted.
The agency attributed these positive developments to continuous restraints on expenditures and rapidly increasing tax revenues spurred by ongoing improvements in tax compliance and collection systems.
