On Tuesday the American credit-rating agency Standard & Poor’s raised Greece’s rating by six levels to “B-minus”. The country had previously been ranked as “selective default”, the agency’s second lowest rating. S&P cited the euro zone’s efforts to maintain Greece within the monetary union as the main reason for its growing confidence in the country’s ability to meet its financial commitments.
Although Greece’s ranking remains the lowest in the EU, many see the agency’s new rating as a vindication of recent progress made: in late November, the euro zone agreed to cut Greece’s debt by a further €40bn and release another €40bn as bailout money to the Greek government. On Monday the country also successfully completed a buy-back of part of its distressed sovereign debt.
Significantly, S&P also described Greece’s outlook as “stable”. By contrast, the economic outlook of other members of the EU, such as the UK, France, Italy and Spain, is rated as “negative”. Moody’s and Fitch, the other main credit-rating agencies, largely share this assessment.
The media response in Germany was mixed. The centre-right Frankfurter Allgemeine Zeitung argued that this year only served to demonstrate that timid steps would do little to resolve the debt crisis. In the newspaper’s opinion, the roots of the crisis have not yet been addressed: only a closer political union can stabilise the monetary union on the long term. Meanwhile, the centre-left Süddeutsche Zeitung saw this not only as good news for Europe, but also for the United States, giving as example the American hedge fund Third Point, which has already earned €500m from betting on Greece remaining in the euro zone. The most optimistic response came from Die Zeit newspaper, which viewed this decision as proof that those who have been betting on Greece defaulting on its debt would be proven wrong: in an article published on Thursday, the paper points out that the interest rates on loans to Greece have fallen back to just over 12%, after peaking at over 35% in March.