Fitch Ratings increased Greece’s credit rating one level confirming PM Antonis Samaras’ elections slogan that the economy is improving. And still in line with Samaras and his coalition partner Venizelos, Fitch warns of “political instability” should early elections take place.
“Greece’s long-term debt was raised to B, five levels below investment grade, from B-, Fitch said in a statement Bloomberg News.
“Greece achieved a primary surplus in the general government account in 2013, a key target” in the European Union-IMF financial assistance program and “an over-performance relative to budget,” the ratings company said in a statement.
“The economy is bottoming out,” Fitch said. “Economic data outturns have been encouraging and support our baseline expectation that the recovery will gradually take hold this year.”
Political Instability
Four years and three prime ministers after Greece’s then-Premier George Papandreou requested an international bailout in return for budget cuts and an economic overhaul that cost him his job, political instability still haunts Greece. If the leftist Syriza party wins the election on May 25, as opinion polls project, the blow may undo the coalition led by New Democracy and unravel the fragile progress toward stability.
“Political risk remains high,” according to the report. “An early general election in 1Q15 is the most likely scenario, although a snap election this year cannot be discounted.” (full article Bloomberg)
Greece holds European Parliament and a second round of local and regional elections on Sunday. Public opinion polls suggest a SYRIZA win the the EU elections and a defeat for Samaras’ coalition government partner PASOK. Should the socialists receive rates around 5%, not only Venizelos threatened to withdraw form the government, but there is a high risk for the government as it holds a very thin majority of 152 seats in a Parliament of 300.
PS Fitch upgraded Greece today. Not last or next Monday… they were rating the public opinion polls apparently lol
