The exams of the Greek economy until the end of the year

By Tasos Dasopoulos

The ratings from three different rating agencies, as well as the ratings for the last tranche of bond earnings of around 650 million euros and the second tranche of 1.97 billion euros from the Recovery Fund, will be the subjects of the examinations for the Greek economy until the end of the year.

The most critical appointments will be those with the rating agencies, since for 2023 the recovery of the investment grade has been set as a national goal, in an extremely critical international situation. On September 16, a few days after the second interest rate hike expected to be announced by the ECB, two ratings are scheduled on the same day by DBRS and Moody’s.

The DBRS house has upgraded the Greek economy to the BB (high) level, one level below the minimum investment level since March 13, therefore and due to the circumstances, it is not expected to make any further moves for this year.

The big question is what Moody’s will do this time, having so far avoided four scheduled ratings. The largest rating agency is the one with the proportionally lowest rating for Greece (Ba3), three notches below investment grade as of November 2020. It has not issued another “verdict” on Greece since then.

The latest rating for this year will be from Standard & Poor’s, which also upgraded the economy’s credit rating to BB+ (also one notch below investment grade) since last April. Unexpectedly, not even this house is expected to proceed with a new upgrade in 2022, with the conditions that seem to be forming for all of Europe.

Bond earnings

The next examination will be the assessment of the Greek economy in order to disburse the last installment from the bond profits pending from the second half of 2019, when due to the national elections the first assessment was not carried out under enhanced supervision. Despite the fact that the evaluation will be done in the context of the European Semester, its subject will be the pending issues of enhanced supervision, but also the country’s fiscal course.

This is given that the time when the evaluation will be done almost coincides with the finalization of the sizes of the draft budget, as well as the submission of the Medium-Term Fiscal Strategy Program 2023-2026, which has been pending since last May.

The representatives of the participating institutions will be informed about the emergency support measures, as well as the permanent interventions planned by the government for 2023.

The second tranche of the Recovery Fund

Another examination will start from the submission next month, by the Ministry of Finance, of the request for the second tranche of 1.97 billion euros from the Recovery Fund.

The tranche will need a period of three months for checks and cross-checks by the competent services of the Commission, in order to determine whether the 25 milestones accompanying the tranche have been fulfilled based on the agreement signed by the Ministry of Finance with the Commission last November. Before its disbursement, in November or December, the Commission will publish its opinion and immediately after that the money will be disbursed to Greece.