Questions raised by Moody’s stance

Agency chose not to revise Greece’s credit rating, retaining the country’s ‘selective default’ status By Sotiris Nikas

Moody’s rating agency may not have changed its rating for Greece on Friday, but the markets did not appear inclined to wait for its announcement to display their own confidence in the country’s economy.

Ahead of the new bond issue expected in the coming week, the market kept the 10-year Greek bond’s benchmark rate at levels not seen in the four years since the country asked for an international bailout. Analysts are interpreting this as a vote of confidence in Greece’s achievements to date.

There are, however, certain questions that have arisen from Moody’s stance.

Moody’s also stated that the disbursement of the bailout installments improves the government’s liquidity before the expiry of state bonds within next month. The only danger the agency cited was the political risk, given the slim majority the government coalition has in Parliament.

Market experts note that Moody’s was not obliged to alter its Greece rating, and that the next dates a Moody’s announcement could be expected are August 1 and November 28. They add that with Thursday’s statement on the course of the local economy the agency feels it has covered the Greek issue and that it is not necessary to change the country’s rating.

Moody’s told Kathimerini on Friday that “if the agency decides to announce a change it will do so based on institutional obligations.”