A vote of confidence in the Greek economy, as well as a message about the country’s next major challenge, was delivered by Bank of Greece Governor Yannis Stournaras, speaking at the Annual Meeting of rating agency Scope Ratings in Athens. The central banker stressed that Greece has now left behind the phase of the fiscal crisis, with successive credit rating upgrades reflecting improvements in economic fundamentals, fiscal consolidation and the recovery of the banking system.

However, Mr. Stournaras stressed that moving to the next rating level requires the continuation of reforms, particularly in the area of institutional quality and the effectiveness of public administration. As he noted, Greece can aim for an A credit rating before 2030, provided it continues to make improvements that strengthen the rule of law, the functioning of the justice system and investor confidence.

Yannis Stournaras’ full speech:

It is with great pleasure that I welcome the Annual Meeting of Scope Ratings here in Athens. The landscape before us – the open horizon and the sea that connects us, although at times turbulent – provides the starting point for an apt metaphor for the European project itself: a long journey of integration, adaptation and shared responsibility, through which we have built institutions that have brought us stability and prosperity.

Credit rating agencies are part of this institutional architecture. Scope Ratings provides independent and comprehensive assessments of credit risk, thereby helping to reduce information asymmetry among investors and enabling them to allocate their capital more efficiently.

It is the first European rating agency and is accepted as an external credit assessment institution under the Eurosystem Credit Assessment Framework (ECAF). In this sense, the vision of Mr. Schoeller, who was still a young man when he founded Scope, has been fully realised.

At the present juncture, we are faced with a major challenge: as Europe seeks to expand its financing through the markets and deepen the integration of its financial market, rating agencies will play an even more important role. The primary purpose of rating agencies, a sector that is already more than 100 years old, is to provide investors with valuable information about the creditworthiness of debt issuers in capital markets. Reliable credit ratings can also be a useful tool for issuers, as they help them broaden their investor base, facilitate the cross-border allocation of capital and contribute to deepening and increasing liquidity in securities markets. The importance of credit ratings was recognised by the European regulatory framework following the global financial crisis of 2007-09.

And, of course, their importance is demonstrated by market behaviour. Recently, downgrades of U.S. federal bonds’ credit ratings triggered concerns about their safety as assets. However, raising doubts about the safety of a benchmark bond inevitably also affects bond pricing internationally. In European countries with weaker fiscal positions or greater political uncertainty, we saw their bond yield differentials, the so-called spreads, widen more than those of other eurozone economies. This development shows that investors are concerned about public finances and the political situation in these countries, in addition to concerns about prolonged inflation.

However, in the euro area we have the advantage of having a central bank whose independence is legally guaranteed, and whose credibility stabilises inflation expectations and helps shield long-term bond yields from concerns about fiscal dominance. Unfortunately, the independence of central banks is being called into question in some advanced economies outside Europe. This therefore presents an opportunity for the Old Continent to increase its international role by increasing the supply of safe assets through joint bond issuance at the European level.

Amid the energy disruption caused by the conflict in the Middle East, the euro area economy is demonstrating resilience. In the second quarter of 2026, real GDP grew by 1.2% year-on-year, while employment continued to increase. The resilient labour market, increased external demand due to the ongoing global boom in artificial intelligence, and higher spending on defence and infrastructure helped the European economy partially absorb the disruption.

At the same time, the Greek economy is also demonstrating remarkable resilience, maintaining higher growth rates than the euro area. Despite successive external shocks and heightened uncertainty, economic activity continued to expand, with real GDP increasing at an annual rate of 1.9% in the second quarter of 2026, significantly above the eurozone average. This resilience is not accidental. It reflects the strong fundamentals of the economy achieved in recent years thanks to fiscal consolidation, the recovery of the banking system, an improved business environment and ongoing reform efforts. All of these contributed to the successive upgrades of the country’s credit rating and strengthened investor confidence.

The Bank of Greece has repeatedly stressed in the past the importance, if not the necessity, of Greece regaining investment grade. Before the 2023 upgrade, a Bank of Greece study showed that regaining investment grade would lead to a reduction of the yield spread between Greek government bonds and their German counterparts by approximately 70 basis points. Indeed, the spreads on Greek government bonds are now approximately 60 basis points lower than they were on August 4, 2023, when Scope Ratings became the first Eurosystem-accepted rating agency to assign Greece a credit rating within investment grade.

Consequently, Greece is a shining example of the benefits of fiscal prudence. Despite significant volatility in global bond markets, Greek government bond spreads have recorded only a moderate increase since the beginning of the year, in contrast to the situation that prevailed shortly before the global financial crisis, when the sharp repricing of sovereign bond risk exposed fiscal vulnerabilities across European states, and particularly in Greece.

At the Bank of Greece, we have developed analytical tools that enable us to extract timely information from Greek government bond prices regarding perceived credit risk. According to our studies, Greece is priced by the bond market closer to countries with an A credit rating than to countries with a BBB rating. In this sense, the market, which in ancient Athens was the place of democratic decision-making, confirms the upward trajectory of the credit rating of the Greek sovereign. This should not be taken as anticipating future credit rating decisions, but it is a useful indication of the extent to which the market’s perception of Greece’s sovereign debt risk has changed.

Bank of Greece studies confirm that the credit ratings assigned by rating agencies are so far consistent with the fundamentals of the Greek economy. Among the main factors that have contributed to the upgrades are sustainable fiscal surpluses, the steadily declining trajectory of public debt, as well as lower political risk, which is also reflected in Greece’s improved ranking on the World Bank’s Political Stability Index.

These favourable economic developments are expected to continue in the medium term. According to Bank of Greece projections, the interest rate-growth differential for the Greek economy will remain favourable over the medium term, as the implicit interest rate, including deferred interest, is expected to remain below the growth rate of nominal GDP. As fiscal risks remain limited, Greek government bond yields are rising in parallel with inflation, as is also the case with the yields on corresponding German bonds. This means that we can expect this favourable debt dynamic to be maintained in the years ahead.

In my view, for Greece to obtain an A credit rating before 2030, continuous improvements in the quality of institutions are required. In the short term, recent reforms in public administration should gradually begin to translate into higher scores for the country on institutional indicators, which are also monitored by rating agencies.

Significant progress has also been made in the justice system. The reform of Greece’s judicial map has already produced tangible results: according to the JustStat database, the average time required to issue a first-instance judgment has been reduced by at least half, specifically to approximately one year (357 days), from more than two years (774 days) before the reform. The Ministry of Justice expects the time required for a case to reach a final judgment to converge with the European average by 2027. These improvements matter to investors. Faster and more predictable judicial proceedings strengthen the rule of law and investor confidence.

Above all, however, what we are seeing in Greece is a change in mindset. During the crisis, credit ratings were often viewed as an external constraint on financing. Today, they are increasingly being used as critical information in financial market analysis and investment decisions. Moreover, rather than questioning the need to achieve upgrades, an increasing number of Greek companies are now targeting positive credit ratings, which will facilitate their access to market-based financing. This change in mindset can contribute to diversifying funding sources for the Greek economy, all the more so now that Europe is promoting the Savings and Investments Union.

More broadly, recent experience has clearly shown that we need to advance the European project. And for this purpose, we need views and assessments of European economic developments that are independent of external geoeconomic influences. Therefore, the Annual Meeting of Scope Ratings in Athens is an excellent opportunity, and I am particularly pleased to welcome today Europe’s first Eurosystem-accepted credit rating agency.