The credit rating agency Moody’s reacted quite positively to the EU deal on Greek debt relief, asserting that it presages a return to the markets after the end of the bailout programme.
“We expect the agreement to pave the way for the government to return to capital market funding on a sustained basis, a credit positive,” it said in a report.
The report notes that Athens will have “very moderate” financing needs for the next decade, citing the extension of maturities on Greek bonds and a large cash buffer, which were the key elements of the eurozone debt relief deal.
“We consider the package a significant benchmark in Greece’s ongoing recovery from its deep government debt, economic and banking crisis,” the report said.
The report also underlined the need for continued reforms and a tight fiscal policy, as the deal calls for high primary surpluses for many years.
However, the report was guarded as regards the growth prospects of the Greek economy.
“Although economic growth has returned and will likely accelerate further this year, Greece’s growth outlook is rather moderate at 2.0-2.5 percent per year at best, unless there is a large boost to investment,” the report said.
According to the report, the enhanced surveillance of the economy by creditors ensures that future governments will not reverse reforms. It notes that there will be quarterly audits, unlike the bi-annual reviews for other countries that exited a bailout.
It also notes measures such as the return of profits on Greek bonds held by European Central banks, but underlines that the debt relief measures are contingent on the continued implementations of reforms.