In a surprise move for Athens, S&P’s outdid itself by taking a new consecutive step yesterday in upgrading the Greek economy.

They maintained their “BBB-” rating for Greece, but raised its outlook for the next grade change to “positive”. In six months when they will come back with a new rating, it will be seen whether the streak can continue.

Standrard and Poor’s is already setting the conditions for new upgrades: Growth, surpluses, debt reduction with reforms to drive Greece forward. They see all of the above happening and attributes them to the reform work and the self-reliance of New Democracy. But also on one condition: that society can see the benefits of progress, so that it can continue to support and participate in the effort.

Signal to the markets

Even in times of war and economic instability – on the verge of recession – in Europe, the American House “risked” to send a message to its clients (investors) who follow it, to trust the Greek economy for the growth and security it can provide.

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As they point out, “with its re-election last year, the New Democracy (ND) government began to implement a strong reform agenda”. They will announce upgrades if the work continues. But they warn of downgrades if:

– fiscal performance and the widening current account deficit deteriorate significantly beyond our expectations

– if geopolitical and external pressures hit Greece harder than we currently assume.

What is the risk?

“In our view, the key implementation risk is if reform fatigue sets in, particularly if improved economic outcomes are not felt across society.”