Scope Ratings reviews its ratings either yearly, or every six months in the case of sovereigns, sub-sovereigns and supranational organisations. Scope performs monitoring reviews to determine whether outstanding ratings remains proportionate. Monitoring reviews are conducted either by performing a portfolio review in terms of the applicable methodology/ies, latest developments, and the rated entity’s financial and operational aspects relative to similarly rated peers; or through targeted reviews on an individual credit. Scope publicly announces the completion of each monitoring review on its website.

Scope completed the monitoring review for the Hellenic Republic (BB/Positive; S-3/Stable) on 23 March 2021, incorporating the update from the sovereign methodology. The review resulted in no action on the assigned ratings. This monitoring note does not constitute a rating action nor does it indicate the likelihood of a credit rating action in the short term. The latest information on the credit ratings in this monitoring note along with the associated rating history can be found on www.scoperatings.com.

Key rating factors

Greece’s long-term ratings at BB/Positive are underpinned by the following credit strengths: i) an improved medium-term debt sustainability, backed by: a track record of sustained fiscal discipline with high primary surpluses pre-Covid-19 crisis; a substantial cash buffer that has been maintained throughout the crisis; a more robust debt profile as a result of active debt management, which has also benefitted from debt relief measures coordinated via its multilateral lenders; and favourable financing rates, also driven by Greece's government securities inclusion in the ECB's pandemic emergency purchase programme; and ii) Greece’s strengthened political stability given the stable parliamentary majority of the new Greek government and continued reform progress despite the challenges caused by the pandemic. Challenges relate to i) an extremely high level of public debt; ii) the very high share of non-performing loans on domestic bank balance sheets, constraining credit supply; and iii) structural weaknesses in the form of low investment and high unemployment, weighing on the country’s growth potential and long-term macroeconomic sustainability.

For the updated scorecards accompanying this review, click here.

The methodology applicable for the reviewed rating(s) and/or rating Outlook(s) (Rating Methodology: Sovereign Ratings, 9 October 2020) is available on https://www.scoperatings.com/#!methodology/list.
This monitoring note is issued by Scope Ratings GmbH, Lennéstraße 5, D-10785 Berlin, Tel +49 30 27891-0.
Lead analyst: Jakob Suwalski, Director

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