Greek Government Debt Upgraded to Investment Grade, Closing Door on Painful Era

FILE - Greek Prime Minister Kyriakos Mitsotakis speaks in parliament ahead of the submission of a no-confidence motion by opposition parties over the government's handling of Greece's worst rail disaster two year ago, in Athens, Wednesday, March 5, 2025. (AP Photo/Thanassis Stavrakis, File)
FILE - Greek Prime Minister Kyriakos Mitsotakis speaks in parliament ahead of the submission of a no-confidence motion by opposition parties over the government's handling of Greece's worst rail disaster two year ago, in Athens, Wednesday, March 5, 2025. (AP Photo/Thanassis Stavrakis, File)
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Greek Government Debt Upgraded to Investment Grade, Closing Door on Painful Era

FILE - Greek Prime Minister Kyriakos Mitsotakis speaks in parliament ahead of the submission of a no-confidence motion by opposition parties over the government's handling of Greece's worst rail disaster two year ago, in Athens, Wednesday, March 5, 2025. (AP Photo/Thanassis Stavrakis, File)
FILE - Greek Prime Minister Kyriakos Mitsotakis speaks in parliament ahead of the submission of a no-confidence motion by opposition parties over the government's handling of Greece's worst rail disaster two year ago, in Athens, Wednesday, March 5, 2025. (AP Photo/Thanassis Stavrakis, File)

Greece’s center-right government on Saturday welcomed a credit rating upgrade by Moody’s, the last major ratings agency to lift junk status on government bonds that began 15 years ago during a severe debt crisis.
“(This) upgrade marks the closing of a great cycle for the Greek economy and certifies the country’s return to European normality,” Finance Minister Kostis Hatzidakis said, describing the action as “a success not only of the government, but of all Greeks.”
Moody’s announced the upgrade to Baa3 from Ba1 late Friday. It cited public finances that “have improved more quickly than we had expected” as a key factor in its decision, The Associated Press reported.
The agency highlighted the government’s policy stance, institutional improvements and stable political environment, saying it expects Greece to “continue to run substantial primary surpluses which will steadily decrease its high debt burden."
Although ratings agencies began returning Greece to investment grade in late 2023, the good news was met with relief by a government that has been hammered for weeks by strikes and protests over its handing of a deadly rail disaster two years ago.
Hatzidakis made the remarks hours before handing over the portfolio to Cabinet colleague Kyriakos Pierrakakis at a swearing-in ceremony later Saturday, a day after the government announced a reshuffle.
“Moody’s upgrade of Greece to Baa3 marks the final step in restoring our investment grade by all major rating agencies, highlighting Greece’s significant progress,” Prime Minister Kyriakos Mitsotakis said in an online post Saturday.
“We remain fully committed to reforms that attract investment, create jobs, and drive sustainable growth,” he said.
Greece spiraled into crisis in 2010 and received three international bailouts to avoid bankruptcy and repair its public finances through successive and grueling austerity programs imposed by European Union lenders and the International Monetary Fund.
National debt as a percentage of gross domestic product peaked in 2020, rising above 200%, but has been steadily falling since and is expected to drop below 150% this year, according to Greek central bank projections.
Moody’s praised the government’s ongoing debt reduction efforts.
“Over a number of years, the Greek public finances have outperformed our baseline expectations, which increases our confidence that Greek debt will remain on a firm downward path,” it said.
“These improvements are due to both ongoing expenditure restraint and tax revenues that are rising quickly in light of ongoing institutional improvements in tax compliance and collection.”



G7 Glosses over Tariffs, Pledges to Cut Global Economic Imbalances 

Canada's Finance Minister Francois-Philippe Champagne, center right, and Governor of the Bank of Canada Tiff Macklem, center left, pose for a family photo with their colleagues at the G7 Finance Ministers meeting in Banff, Alta., Wednesday, May 21, 2025. (Jeff McIntosh /The Canadian Press via AP)
Canada's Finance Minister Francois-Philippe Champagne, center right, and Governor of the Bank of Canada Tiff Macklem, center left, pose for a family photo with their colleagues at the G7 Finance Ministers meeting in Banff, Alta., Wednesday, May 21, 2025. (Jeff McIntosh /The Canadian Press via AP)
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G7 Glosses over Tariffs, Pledges to Cut Global Economic Imbalances 

Canada's Finance Minister Francois-Philippe Champagne, center right, and Governor of the Bank of Canada Tiff Macklem, center left, pose for a family photo with their colleagues at the G7 Finance Ministers meeting in Banff, Alta., Wednesday, May 21, 2025. (Jeff McIntosh /The Canadian Press via AP)
Canada's Finance Minister Francois-Philippe Champagne, center right, and Governor of the Bank of Canada Tiff Macklem, center left, pose for a family photo with their colleagues at the G7 Finance Ministers meeting in Banff, Alta., Wednesday, May 21, 2025. (Jeff McIntosh /The Canadian Press via AP)

Finance ministers and central bank governors from the Group of Seven democracies papered over their differences on Thursday, pledging to tackle "excessive imbalances" in the global economy and saying they could increase sanctions on Russia.

There had been doubt before the meeting whether it would issue a final communique, in light of divisions over US tariffs and Washington's reluctance to refer to Russia's war on Ukraine as illegal.

But after three days of talks, participants signed on to a lengthy document devoid of previous language on fighting climate change and which also softened references to the Ukraine war.

"We found common ground on the most pressing global issues that we face," Canadian Finance Minister Francois-Philippe Champagne told the closing press conference.

"I think it sends a very clear signal to the world ... that the G7 is united in purpose and in action."

The officials, who met in the Canadian Rocky Mountains, called for a common understanding of how "non-market policies and practices" undermine international economic security.

The document did not name China, but references by the United States and other G7 economies to non-market policies and practices are often targeted at its state subsidies and export-driven economic model.

The G7 statement omitted mention of US President Donald Trump's tariffs that are disrupting global trade and supply chains and swelling economic uncertainty.

Champagne downplayed the lack of communique language on tariffs, but said ministers "were not skating around" the issue and had discussed its impact. Canada seeks a deal to eliminate Trump's tariffs of 25% on many goods, such as steel and aluminum.

"We're trying to enhance growth and stability," he added. "And obviously tariffs are something in that context that you can't avoid discussing."

The gathering sets the stage for a summit of G7 leaders from June 15 to 17 in the nearby mountain resort area of Kananaskis. Trump will attend the summit, the White House confirmed on Thursday.

The G7 communique called for an analysis of market concentration and international supply chain resilience.

"We agree on the importance of a level playing field and taking a broadly coordinated approach to address the harm caused by those who do not abide by the same rules and lack transparency," the grouping said.

It also recognized an increase in low-value international "de minimis" package shipments that can overwhelm customs and tax collection systems and be used for smuggling drugs and other illicit goods.

The duty-free exemption for packages of value less than $800 has been exploited by Chinese e-commerce companies, such as Shein and Temu.

The Chinese embassy in Ottawa said it could not immediately comment on the G7 statement.

'BRUTAL' WAR

The G7 finance chiefs condemned what they called Russia's "continued brutal war" against Ukraine and said if ceasefire efforts failed, they would explore all possible options, including "further ramping up sanctions."

The description of the Ukraine war was watered down from October's G7 statement, before Trump's re-election, calling it an "illegal, unjustifiable, and unprovoked war of aggression against Ukraine."

Trump has diminished US support for Ukraine and suggested that Kyiv was to blame for the conflict as he tries to coax Russia into peace talks.

But the G7 ministers pledged to work together to ensure no countries that financed the Russian war would be eligible to benefit from the reconstruction of Ukraine.

"That's a very big statement," said Champagne, calling it a fundamental pillar of the communique. It did not name China or other countries the West has accused of supplying critical components to Russia in defiance of sanctions.

Russia's sovereign assets in G7 jurisdictions would remain immobilized until Moscow ended the war and paid for the damage it has caused to Ukraine, the communique said.

European Commission Executive Vice President Valdis Dombrovskis said the G7 ministers discussed a proposal to lower the G7-led price cap of $60 a barrel on Russian oil exports, since Russian crude is now selling below that.

But the plan was not mentioned in the communique, partly because US Treasury Secretary Scott Bessent was not convinced it was needed, a European official said.

Brent crude currently trades around $64 per barrel.

A European official said the United States is "not convinced" about lowering the Russian oil price cap.

A US Treasury spokesperson said only that Bessent's G7 engagements "were both pleasant and constructive, and we look forward to our future engagements with all of our G7 partners on issues of mutual interest."

Bessent came to Banff to the relief of many participants after he skipped a G20 finance meeting in February in the South African city of Cape Town.

G7 officials described his interactions as "constructive" and "flexible" and said some initial stiffness gave way to jokes over dinner.

"We had a feeling that it was a discussion between friends and allies," a French official said.

But Bessent took an unusually low profile for a US Treasury secretary at the G7 meeting, holding no news conference and largely operating out of sight of the press.

"I had a very productive day," he told a reporter on Wednesday, in his only public comment to the media.