Rating agency Moody’s has postponed until August its assessment of Greece’s creditworthiness, as scheduled for Friday, citing serious risks of political instability.
The agency noted the weakness of the coalition government may lead to early parliamentary elections within the next six months. Such a development would jeopardize the continuation of the troika aid program and reduce confidence in the Greek state both domestically and internationally.
Moody’s said that it does not have any obligation to issue to a rating action, and that the agency’s calendar is only indicative, adding that the agency is covered from yesterday’s report on the course of the Greek program and Greek economy.
It is two years since Greece’s debt restructuring, when Moody’s downgraded Greek bonds to a ‘Caa3’ rating, nine notches below investment grade, in which time its peers S&P and Fitch have both raised their ratings. Moody’s says its position on Greece was sufficiently explained in its report on Thursday, which praised the enactment of the multi-bill that ensures the continuation of the structural reforms, supporting the country’s long-term economic development.
Markets had been had been expecting an upgraded rating from Moody’s, given that Greek bonds are being warmly received by investors after a four-year hiatus.