Agencies offer vote of confidence

International investors yesterday offered a vote of confidence to the new PASOK government that emerged from Sunday’s elections, but noted that unless the necessary reforms are implemented, Greece’s credit rating will move southward. «Depending on the policies the government will follow, the credit rating of Greece will head higher or lower,» Marko Mrsnik, a Standard & Poors analyst told Kathimerini. The firm announced yesterday it is not altering its rating for the country (A-) and maintains its outlook as «stable.» The majority afforded by PASOK’s 160 deputies in the new Parliament makes investors and international agencies more optimistic that they will finally see Greece implementing the changes they have repeatedly said it needs. This optimism was immediately reflected in the narrowing of the spread between Greek and German bonds that stood at 126 basis points yesterday against 138 bp last Friday. «The single-party government was perceived as good news, as the bond market is showing,» said Megan Green, an Economist Intelligence Unit analyst. However she voiced her concern about how the new government will fund its economic policy and whether the deficit will soar further. Fitch Ratings’ Chris Price said yesterday that his agency will give the new administration a grace period of two months and then revise its credit rating if this is deemed necessary.