Rating experts warn of risks after August


TAGS: Finance, Markets

A world of risks awaits the Greek economy after its emergence from the bailout program in August, according to the main credit rating agencies.

Kathimerini asked for the views of leading analysts at Moody’s, Standard & Poor’s and Fitch Rating, all of which have recently upgraded the country’s sovereign rating over the last couple of months. They all responded that any divergence from the fiscal targets, the slowdown of reforms and any political unrest would expose the local economy to great risks.

After the exit from the protection of the bailout program, there may also be developments that Greece has no control over but will affect it significantly, such as an unrest on international markets that would raise the cost of borrowing.

The analysts stopped short of offering any opinions as to when the Greek bonds will emerge from their current “junk” status.

Crucially, the European Central Bank lends to local banks thanks to the bailout program, which allows the ECB to waive the ban on junk state bonds as collateral. Once the program has ended, Greek banks will have to wait for bonds to emerge from junk status for the ECB cash flow to resume.