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Greece’s centre-right government celebrated a milestone on Saturday with a credit rating upgrade by Moody’s, the final major ratings agency to lift the junk status on the country’s government bonds, which had been in place for 15 years since the country’s severe debt crisis.
“This upgrade marks the closing of a great cycle for the Greek economy and certifies the country’s return to European normality,” said Finance Minister Kostis Hatzidakis, who described the move as “a success not only of the government, but of all Greeks, ” reported news agency AP.
Moody’s raised Greece’s rating from Ba1 to Baa3 late Friday, citing an improvement in public finances that “have improved more quickly than we had expected” as a key factor behind its decision.
The credit rating agency also praised the government’s policy stance, institutional improvements, and the stable political environment, expressing confidence that Greece will “continue to run substantial primary surpluses, which will steadily decrease its high debt burden.”
While ratings agencies began restoring Greece’s investment grade status in late 2023, the news of Moody’s upgrade brought a sense of relief to the government, which has faced intense criticism in recent weeks due to strikes and protests over its handling of a deadly rail disaster two years ago.
Hatzidakis made these remarks just hours before he handed over the finance portfolio to Cabinet colleague Kyriakos Pierrakakis in a swearing-in ceremony on Saturday, following the government’s announcement of a reshuffle.
“Moody’s upgrade of Greece to Baa3 marks the final step in restoring our investment grade by all major rating agencies, highlighting Greece’s significant progress,” said Prime Minister Kyriakos Mitsotakis in an online post on Saturday. “We remain fully committed to reforms that attract investment, create jobs, and drive sustainable growth,” he added.
Greece had spiraled into crisis in 2010, requiring three international bailouts to avoid bankruptcy and repair its public finances. These efforts involved successive and harsh austerity programs imposed by European Union lenders and the International Monetary Fund.
National debt as a percentage of GDP peaked in 2020, surpassing 200%, but has steadily fallen since then and is projected to drop below 150% in 2025, according to Greek central bank projections.
Moody’s acknowledged the government’s ongoing efforts to reduce debt. “Over a number of years, the Greek public finances have outperformed our baseline expectations, which increases our confidence that Greek debt will remain on a firm downward path,” the agency said, highlighting the improvements in both expenditure restraint and rapidly increasing tax revenues due to enhanced tax compliance and collection measures
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