Note two days: July 8 and September 16. These countries, Fitch and Moody ‘s, respectively, have planned the next ratings of the Greek debt and must proceed to the upgrade of Greece to BB + the first and Ba2 the second. Alternatively, the upgrade from Fitch will come on October 7, which is the last rating of the house for this year (it is the only one of the four big ones with three scheduled ratings of Greece in a year).

If the Liberal information is confirmed, then Fitch will soon give us one step up from the investment tier and Moody’s two steps from the target. Overall, at the end of 2022, the Greek economy will wait for just one upgrade from three companies, S&P, Fitch or DBRS, to catch the investment rank for the first time since the dramatic 2010. Then on April 27, a few days After the speech of George Papandreou from Kastelorizo, S&P proceeded to the first degradation of Greece in garbage and the rest is history.

In a less likely scenario, the first upgrade to the Investment grade could come from Scope Ratings, the first rating agency to upgrade our country to BB + in September 2021, one step up from the investment grade. The point is that Scope is not in the 4 houses that the ECB takes into account for bond accuracy, although this could change with Scope being recognized by the ESF in the coming months (the house’s application is pending in 2016 in one process that usually takes years).

This will be an extremely important development that the Greek economy is anxiously awaiting because it will unlock large inflows, mainly of long-term investment funds that currently do not reach Greece due to the low rating. The investment funds that will re-radar the Greek economy, both government and corporate bonds and the stock market.

It is no coincidence that a few days ago the Minister of Finance, Christos Staikouras, stated from the floor of Parliament that despite the negative situation, “Greece receives a vote of confidence, with successive upgrades, as a result of hard-working reform effort, good fiscal performance, effective strategy and sufficient cash “.

Information indicates that both at Fitch and Moody’s, the climate is particularly positive for Greece for many reasons. First, our country, despite the higher debt, as a percentage of GDP, in Europe, has the best debt profile, as the largest percentage is in the hands of the “official sector” and has a long duration. Secondly, there have been many reforms in recent years, although the houses they consider believe that there are still many that need to be implemented. Third, Greece has put its budgets in order, does not deviate from its goals and has a significant cash cushion. Fourth, banks have made tremendous progress in consolidating their balance sheets and reducing red loans. Fifth, with the investment tier upgrade, Greece will henceforth participate in all ESF operations and will return fully to the normalization of monetary policy transmission, as it is today the only Eurozone country outside the investment tier.

With international bond yields soaring in recent months, Greek securities could not be an exception with the result that Greek government borrowing costs are currently at 3 years higher, returning to the pre-pandemic era. Greek bonds did not participate in the Central Bank’s extraordinary bond program. This development makes imperative the need to upgrade the Greek debt to the “investment grade”.

Christine Lagarde may have said she would not allow the spreads to spiral out of control, but at this stage the ESF’s main concern is to tame inflation. Already, analysts at Goldman Sachs, ING, Citi, Oxford Economics and Capital Economics believe that raising interest rates in July should be taken for granted, while some do not rule out the ESF surprising by raising interest rates either by 0.25% in July instead of July, or 0.50% in July instead of 0.25%.

These estimates are followed by interest rates on deposits and subsequent increases in lending rates. In any case, in the coming months the ECB interest rates will cease to be in negative territory, marking the end of ample liquidity.

In this context, the Greek economy of successive crises, the exclusion from the markets of the last decade and the excessive debt, is called to find investors who will finance the recovery of the coming years. Undoubtedly, the existence of the Recovery Fund is a guarantee, but the inflow of foreign capital is crucial. That is why the implementation of the investment stage in the first half of 2023 is the big goal.

The following ratings:

Fitch: July 8 – October 7

Moody’s: September 16th

DBRS: 16 September

S&P: October 21