Greece could be about to rid itself of the last vestiges of its debt crisis with a credit upgrade that would lift it conclusively out of the junk territory it entered 15 years ago.
Such a decision Friday by Moody’s Ratings, the only major ratings company that doesn’t have Greece at investment grade, would be largely symbolic: The country’s bonds have been trading for two years at levels suggesting a rosier assessment.
But a one-step increase in Moody’s Ba1 rating — which currently carries a positive outlook — would sever any remaining link to the debt chaos, successive bailouts and financial turmoil that roiled Greece for more than a decade.
Moody’s has been an outlier. S&P and Fitch have long rated Greece at investment — rewarding a remarkable turnaround in the economy and a fiscal trajectory that’s become much more favourable.
Gross domestic product, which has outpaced much of the eurozone since the pandemic, advanced by 2.3% in 2024. Net debt, meanwhile, fell over the same period. Prime Minister Kyriakos Mitsotakis has vowed to maintain focus on budget discipline and continue delivering primary surpluses, which exclude interest payments.
He’s also said his administration will return part of Greece’s bailout loans ahead of schedule this year, as it did in the past. An early repayment of at least €5 billion of long-term obligations that mature between 2033 and 2042 is in the pipeline, he told Bloomberg in November.
Scope Ratings and Morningstar DBRS recently upgraded Greece further into investment grade, citing a better-than-anticipated fiscal performance, strong reductions in debt and rapid economic growth. Fitch Ratings and S&P rate Greece just above junk.
Such improving assessments have reduced Greek borrowing costs relative to its neighbours. Yields on ten-year benchmark debt were already below their Italian counterparts when it first reclaimed investment status in 2023.
They’re now around 80 basis points higher than those of Germany, the region’s safest asset. That’s close to the lowest since the global financial crisis — reflecting optimism that Moody’s will soon follow S&P and Fitch with an upgrade.
Long-end Greek debt fared best on Friday as investors scrambled to buy more of the 30-year bond which was sold a day earlier, lowering the corresponding yield six basis points to 4.34%.
This story was produced with the assistance of Bloomberg Automation.
[Also read:
Europe’s bank bailout era draws to end with states selling out](https://www.luxtimes.lu/businessandfinance/europe-s-bank-bailout-era-draws-to-end-with-states-selling-out/22955152.html)