The rating agencies welcomed the result of the May 21 elections and the victory of New Democracy
By Chrysostomos Tsoufis
By making its recommendations public Commission towards Greece, all sections of the road that has the final destination of the investment stage are almost completed.
Her report European Commission there were no negative surprises. It considers this year’s growth target realistic and that of 2024 ambitious, and contains recommendations on how the next Greek government should proceed in the area of fiscal spending by 2.6%, taxation and reforms. Of course, the dimensions of the development are not written in stone but will be the subject of negotiations with Brussels.
Of course, the elections had preceded, the result of which was seen positively by the markets and rating agencies. In their notes – some less, some more – they acknowledge that the election result May 21st it almost nullifies the electoral risk that could come from a coalition government and ensures the continuation of reforms, an estimate that is essentially a wink.
Given that it is considered extremely doubtful that an upgrade will come from the Fitch on June 9th who decides first – possibly upgrading the outlook from stable to positive – the rating agencies will wait for the second elections on June 25th and above all the program statements of the new government – placed around mid-July – to “press” the upgrade button.
When could this be done? Shortly after the return from the August vacation, on September 8, DBRS, the largest of the rest outside the big 3, which has been recognized by the ECB. The Canadian house has Greece one step ahead of the investment stage with positive prospects.
We could have pilot fires on August 4 from Scope Ratings, which is not recognized by the ECB. In any case, a possible positive decision would create an atmosphere.
The second chance for the country is Standard&Poor’s which decides on October 20 for the second time in the year. The submission of the draft budget for 2024 will have preceded it. Otherwise, we will have to wait until the first of December with Moody’s, which closes the cycle of this year’s evaluations.
On March 17, Moody’s, the strictest of the rating agencies, gave an upgrade signal, revising the outlook for the Greek bond from stable to positive. It decides again on September 15, but this house has Greece 3 steps below the investment level.
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