
Political risk remains high in Greece, Moody’s assessed in a report on 29 September, among other things, examining how the elections affect the country’s credit profile. As it estimates, the change in the electoral law, with the abolition of the bonus of 50 seats, makes it unlikely that a party will win an absolute majority or enough seats to form a stable governing coalition.
Therefore, a second round of elections in which some seat bonus will be reinstated and a period of a few weeks or more for the formation of a government is the most likely scenario for this house.
Reforms
The international ratings agency, although it predicts that more time will be required for the formation of a government, considers that the risk of a reversal of the reforms or a substantial change in the course of fiscal and economic policy is low, although creditors require Greece to continue fiscal prudent fiscal policies further promoting the necessary institutional and structural reforms.
Read also: Greek economy can prevail without a new exit to markets
However, according to the common consensus of analysts’ estimates, the deep recession in which the eurozone is foreseen to find itself in 2023, as well as the electoral cycle, are expected not only to slow down the growth rate of Greece’s GDP, but also to delay the acquisition of “investment grade” by the rating agencies possibly, conditionally, at the end of next year or even later, as the question is whether the country will achieve the primary surplus it has committed to for next year.
The election scenarios
Today the markets expect elections next May for at least two rounds. Thus, the upgrade to “investment grade” of Greece could come, according to pundit estimates, at the earliest a few months after the assumption of the new government and after the first signs that the country has not forsaken its commitments.
It should be noted that Moody’s assesses Greece with “Ba3” and stable outlook (three steps below investment grade), maintaining the worst rating from the other houses, as Fitch with “BB” and positive outlook is two steps below investment grade, while S&P with ‘BB+’ and DBRS with ‘BB high’, with a stable outlook, are one breath (just one grade) away from the Investment Grade IG threshold.
As the investment category includes bonds with ratings of BBB-/Baa3 or better, in order for Greece to obtain it, one of these four agencies, which are accepted by the Eurosystem as external credit rating agencies, will have to upgrade the Greek State to investment grade.


Latest News

Trump Tariffs Jeopardize Growth: Piraeus Chamber of Commerce
The tariffs, aimed at reducing the U.S. trade deficit, are expected to have both direct and indirect effects on the European economy

EU Condemns Trump Tariffs, Prepares to Retaliate
As tensions escalate, the EU is expected to continue negotiations with Washington while preparing for potential economic retaliation.

The Likely Impact of Trump Tariffs on Europe and Greece
Trump tariffs are expected to negatively affect economic growth in the Eurozone while Greece's exports could take a hit.

Motor Oil Results for 2024: Adjusted EBITDA of 995 mln€; Proposed Dividend of 1.4€ Per Share
Adjusted EBITDA for 2024 was down 33% yoy. The adjusted profit after tax for 2024 stood at 504 million euros, a 43% decrease from the previous year

Cost of Living: Why Greece’s 3% Inflation Is Raising Alarm
Greece appears to be in a more difficult position when it comes to price hikes, just as we enter the era of Trump’s tariffs.

Fitch Ratings Upgrades the Four Greek Systemic Banks
NBG’s upgrade reflects the bank’s ongoing improvements in its credit profile, Fitch notes in its report, including strong profitability, a reduction in non-performing exposures (NPEs), and lower credit losses

Trump to Announce Sweeping New Tariffs Wednesday, Global Retaliation Expected
With Trump's announcement just hours away, markets, businesses, and foreign governments are bracing for the fallout of one of the most aggressive shifts in U.S. trade policy in decades.

Inflation in Greece at 3.1% in March, Eurostat Reports
Average inflation in the eurozone settled at 2.2%, compared to 2.3% in February

Greece’s Unemployment Rate Drops to 8.6% in February
Despite the overall decline, unemployment remains higher among women and young people.

Jerry Kalogiratos Highlights Key Role of Energy Transition and Data Demand in LNG Outlook
Energy transition and the prospects of LNG were discussed at Capital Link’s 19th Annual International Maritime Forum, during a panel discussion with Jerry Kalogiratos (Capital Clean Energy Carriers Corp.)