The credit rating agency Moody’s reacted quite positively to the EU

deal on Greek debt relief, asserting that it presages a return to the

markets after the end of the bailout programme.

“We expect the agreement to pave the way for the government to

return to capital market funding on a sustained basis, a credit

positive,” it said in a report.

The report notes that Athens will have “very moderate” financing needs

for the next decade, citing the extension of maturities on Greek bonds

and a large cash buffer, which were the key elements of the eurozone

debt relief deal.

“We consider the package a significant benchmark in Greece’s

ongoing recovery from its deep government debt, economic and banking

crisis,” the report said.

The report also underlined the need for continued reforms and a

tight fiscal policy, as the deal calls for high primary surpluses for

many years.

However, the report was guarded as regards the growth prospects of the Greek economy.

“Although economic growth has returned and will likely accelerate

further this year, Greece’s growth outlook is rather moderate at 2.0-2.5

percent per year at best, unless there is a large boost to investment,”

the report said.

According to the report, the enhanced surveillance of the economy by

creditors ensures that future governments will not reverse reforms. It

notes that there will be quarterly audits, unlike the bi-annual reviews

for other countries that exited a bailout.

It also notes measures such as the return of profits on Greek bonds held

by European Central banks, but underlines that the debt relief measures

are contingent on the continued implementations of reforms.

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