June 10, 2023

Athens News

News in English from Greece

Moody’s: New ND government in Greece will "credit positive"

New Democracy’s strong performance in last Sunday’s elections greatly raises the chances that it will form a government after a repeat election at the end of June, ratings agency Moody’s said Thursday.

This means that there will be continuity in fiscal and economic policies, which is a positive factor for Greece’s rating, the agency added. The agency also predicts that Greece will experience one of the world’s largest debt reductions, with total government debt falling below 150% of GDP in 2025, compared to 171.3% in 2022, on the prospect of much higher nominal GDP growth in subsequent years.

Maintaining a focus on improving the business environment and the banking sector, along with the implementation of milestones and reforms under the national recovery plan, will help support economic growth, Moody’s said. Combined with a commitment to fiscal adjustment and an increase in the primary surplus, maintaining current fiscal and economic policies “improves the prospects for a significant reduction in Greece’s public debt burden,” the report said.

The report also highlights that the Greek economy has rebounded strongly from the pandemic, with real GDP expected to grow by 5.9% in 2022 and 8.4% in 2021 after declining by 9% in 2020.

The agency does not specify that GDP growth of 5.9% occurred against the backdrop of official inflation of 9%. At the same time, for the period of the rule of the New Democracy from 2019 to the current 2023. If in 2019 the external debt of Greece was 545,751 million US dollars (487,635.8 million euros), then in 2023 it increased to 660,313 million US dollars (584,878.8 million euros).

Greece’s external debt rose by 21% from 2019 to 2022. Greece’s GDP at nominal value grew by 14% from 2019 to 2020. Greece’s external debt to GDP ratio was 260% in 2019 and 276% in 2020. This is one of the highest rates among countries in the world.

What is interesting: in 2015-2016, after SYRIZA came to power, Greece had a much better economic performance and a higher standard of living of the population, which improved even more after a significant reduction in debt. But the ratings were at the “garbage” level, in fact, then the international financial agencies declared Greece bankrupt.

Even then, the author of these lines expressed his opinion that ratings of international financial agencies and the real state of the economy have no connection with each other and are determined only by the political situation.

Now these words have acquired another proof: no matter what state your economy is in, as long as the country follows Washington’s political lead, is a member of NATO and hosts US military bases on its territory. It automatically receives a high economic rating, low interest rates on loans and praise from Washington and Brussels. How the people live at the same time, nobody cares anymore.

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