Lhe news was somewhat overshadowed by the terrible fires ravaging Greece and its islands. She is good though. On August 8, the rating agency Scope Ratings raised the country’s rating to BBB–, allowing its sovereign bonds to move from the “speculative” category to the class of investments considered to be less dangerous.
This hadn’t happened since the 2010 debt crisis and the country’s default. Admittedly, Greece is not completely out of financial purgatory – it is still necessary that at least two of the three major rating agencies (Fitch, Moody’s and S&P Global Ratings) also remove its rating from the speculative category so that certain institutional investors, who do not have the right to touch the debts of this class, can buy theirs. But, according to analysts, it will not be long. Long singled out as the bad student in the euro zone, Greece is about to fall into line, after a decade of effort and sacrifice.
“It is a very important and very rapid achievement from a historical point of view”, judge Dennis Shen, country specialist at Scope Ratings. Despite a 30% collapse in the gross domestic product (GDP) between 2008 and 2013, the threat of leaving the euro zone (“Grexit”) and a terrible austerity cure for the population, he adds, “Greece has persevered, adopting ambitious reforms, dramatically increasing investment and economic competitiveness”.
firewall
In fact, public debt, which peaked at more than 205% of GDP in 2020, is expected to fall to 160.7% this year, according to the International Monetary Fund. The unemployment rate has fallen from 28% to 11.1% since 2013, GDP has grown by 5.9% in 2022 – more than the European average of 3.4% – and banks have cleaned up their balance sheets. Better: multinationals, like Pfizer or Microsoft, have invested in the country.
In addition, Greece has regained the confidence of its European partners, who have built around it firewalls that did not exist twelve years ago. The European Central Bank did not hesitate to buy its debt during the pandemic as part of its emergency program, and Athens received its share of the European recovery plan. No offense to Anglo-Saxon cassandres and eurosceptics of all persuasions, the euro zone has proven that it does not let its members down. And that it is ready to reform itself – albeit slowly, albeit partially – to show more solidarity.
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