How rating agencies assess political risk in Greece

"This is one of those times when we can say we are in a commanding position," relevant sources tell *iefimerida*.

This very picture is reflected in Friday’s two positive credit assessments, which highlight the reduction in debt, the growth momentum generated by Recovery Fund resources, and the improved efficiency of the tax administration. However, one might reasonably wonder if—and to what extent—international investors, and credit rating agencies in particular, are factoring in the country's entry into an election cycle as the countdown to the polls begins. In simple terms, how do they assess political risk within this volatile international environment? Market signals and the dual interpretation
In all recent interactions between Greek officials and market players, the message has been that foreign observers do not perceive political risk in the country—despite polls indicating that forming a government with an absolute majority will be no simple task and that a scenario involving successive rounds of elections is far from far-fetched.

What leads them to this conclusion, and how do their assessments differ from previous years? "They believe that policies—fiscal, reform-oriented, and structural—will not change," the same sources say. However, this message carries a dual meaning that is clearly reflected in the core of recent credit assessments: if these policies were to be overturned, the Greek economy would once again take center stage, but for the wrong reasons.

The message from Moody’s
"Greece’s ratings could be upgraded if we saw a credible multi-year package of structural economic and institutional reforms building on the progress made over the last decade... The positive outlook on Greece’s ratings indicates that a credit rating downgrade is unlikely." However, the outlook could revert to stable if future governments do not continue the process of structural economic and institutional reforms, or if the commitment to debt reduction via primary surpluses weakens.”

Scope’s message
“We expect broad policy continuity following the parliamentary elections scheduled for 2027. While current opinion polls suggest that government formation could become more complex, the risk of significant policy reversals appears limited. Strong fiscal and economic performance in recent years has bolstered the credibility of the current policy framework, while broad political consensus on key fiscal and economic priorities supports policy continuity. The ongoing implementation of EU-funded investment programs and the EU fiscal framework further reinforce the commitment to structural reforms and prudent fiscal policies.” DBRS's message:
"Greece's political environment has been characterized by a high degree of political stability in recent years... The next parliamentary elections must be held by the end of July 2027. While current opinion polls point to a potentially difficult government formation process following next year's parliamentary elections, we view political risk as limited, given the broad consensus among major political parties on key policy issues, including fiscal policy."

S&P is next in line for a credit rating review (October 23), while the year will conclude (November 6) with Fitch's report. Even if the two agencies do not proceed with an upgrade—whether of creditworthiness or the economic outlook—they are expected to convey the exact same political message, aimed at the exact same recipients.