The analysis of Moody’s, and its explanation for not upgrading Greece’s credit rating, completely reflects the dangers and the murky terrain in which the country will proceeds in the months leading up to the general election.

The reasons that led to Moody’s decision are the important obstacles on the path toward sustainable development, the country’s exceptionally strict fiscal targets, and the weaknesses of the banking system.

However, the most important observation concerns the political will of the government to proceed with the reforms that the economy needs. The analysis underlines the danger of prospective tensions with creditors over the suspension of agreed reforms, a clear reference to the issue of pension cuts.

Although the analysis notes that the cost of servicing the debt remains low, it states that a return to the markets will act as incentive for a new upgrading.

Moody’s is not the first or the last credit rating agency to describe problems identified by domestic and international analysts. The ambivalence in the ruling majority regarding reforms is obvious, despite the fact that it has agreed with creditors to implement them.

With an eye on the general election, for some time there has been a subterranean battle within the government, with a large segment of ministers and party cadres supporting pledges of benefits and handouts which target the electorate.

It is obvious that despite the steps that have been taken, mainly on the fiscal front, the economy remains exceptionally vulnerable to foreign and domestic pressures. With banks being the weak link in the economy, due to the explosive package of Non-Performing Loans (NPLs) that have rendered them inert, growth will continue to move at a snail’s pace.

The return to the markets is constantly being postponed, due to broader instability. Public investment is constantly shrinking in order to achieve primary surpluses greater than the target, while the electoral cycle that has begun contributes to maintaining a climate of political instability.

Essentially, the economy again faces the danger of being confronted with a cycle of political uncertainty, as the government is torn between its commitments and the country’s needs on the one hand, and fleeting electoral and partisan motives on the other.

We shall soon see whether logic prevails or whether we are again led to borderline situations.