Speech by the Governor of the Bank of Greece, Yannis Stournaras, at the Annual Reunion of the Scope Ratings titled “The European project, the role of rating agencies and the prospects of the Greek economy”
24/09/2026 - Speeches
It is with great pleasure to address the Annual Reunion of the Scope Ratings here in Athens. The setting before us – the open horizon and the uniting sea, which at times becomes turbulent – offers a fitting metaphor for the European project itself: a long journey of integration, adjustment and shared responsibility, through which we have built institutions that have delivered stability and prosperity.
Credit rating agencies are part of that institutional architecture. Scope Ratings provides independent and rigorous assessments of issuer credit risk, thereby helping reduce information asymmetries and enabling investors to allocate capital more efficiently.
It is the first European rating agency and it is accepted as an External Credit Assessment Institution in the context of the Eurosystem Credit Assessment Framework. In that sense, the vision of the young Mr. Schoeller has been accomplished in full.
Meanwhile, a great challenge lies ahead: as Europe seeks to expand its market-based financing and deepen its financial market integration, rating agencies will have an even more important role to play. The core business of the rating agencies sector, which already counts more than 100 years, is to provide valuable information to investors about the creditworthiness of debt issuers in capital markets. Credible ratings can be a useful tool for issuers, as they help them broaden their investor base, facilitate cross-border capital allocation and support deeper and more liquid debt markets. The importance of credit ratings has been acknowledged by the European regulatory framework in the aftermath of the Global Financial Crisis.
And, of course, their importance is evidenced by market behaviour. Recently, the rating downgrades of the US Treasuries sparked concerns about their safe-asset status. But questioning the benchmark definitely affects pricing globally. European sovereigns with weaker fiscal positions or facing greater political uncertainty have seen their bond spreads widen more than other euro area sovereigns. This movement reflects political and fiscal concerns to the eyes of investors on top of those about prolonged inflation.
Yet, in the euro area, we benefit from a statutory independent central bank, whose credibility anchors inflation expectations and helps insulate long-term yields from concerns over fiscal dominance. Unfortunately, central bank independence is being questioned in some non-European advanced economies. This highlights an opportunity for Europe to increase its role as an international safe-asset provider.
Amid the energy shock stemming from the Middle East conflict, the euro area economy has demonstrated resilience. In the second quarter of 2026, real GDP expanded by 1.2% year on year, while employment continued to grow. A resilient labour market, stronger external demand, due to the ongoing global AI boom, and higher expenditure on defence and infrastructure have helped the European economy absorb part of the shock.
At the same time, the Greek economy has also exhibited remarkable resilience, maintaining stronger growth rates than the euro area. Despite successive external shocks and heightened uncertainty, economic activity has continued to expand, with real GDP growing by 1.9%, year on year, in the second quarter of 2026, well above the euro area average. This resilience is not accidental. It reflects strong economic fundamentals built over recent years through fiscal consolidation, the repair of the banking system, an improved business environment and sustained reform efforts. All these have contributed to successive rating upgrades and, as a result, increased investor confidence.
The Bank of Greece had long stressed the importance, if not necessity, of restoring Greece’s Investment-Grade status. Before the 2023 upgrade, Bank of Greece research indicated that this would reduce Greek government bond spreads vis-à-vis the German Bund by about 70 basis points. Indeed, Greek sovereign bond spreads are now about 60 basis points lower than on 4 August 2023, when Scope Ratings was the first rating agency accepted by the Eurosystem to assign Investment-Grade status to Greece.
So, Greece provides a notable example of the benefits of fiscal prudence. Despite the considerable volatility in global bond markets, Greek sovereign spreads have widened only modestly since the beginning of the year. This is in stark contrast with the situation just before the Global Financial Crisis, when the sharp re-pricing of sovereign risks exposed fiscal vulnerabilities across European countries, particularly in Greece.
At the Bank of Greece, we have developed analytical tools that allow us to extract timely information from Greek sovereign bond prices about perceived credit risk. According to our research, Greece is priced by the bond market closer to A-rated sovereigns than to BBB-rated ones. In that sense, the market or, let me use a Greek word that you all know “agora”, that was the place of democratic decision-making in ancient Athens, confirms the upward trajectory of the Greek sovereign credit rating. This should not be interpreted as a prediction of future rating decisions. It is, however, a useful indication of how much market perceptions of Greek sovereign risk have changed.
Bank of Greece research confirms that the assessments of rating agencies are, so far, in line with the fundamentals of the Greek economy. Key drivers of the rating upgrades include sustained fiscal surpluses, a firmly downward trajectory of public debt as well as lower political risk; the latter is also reflected in Greece’s improved ranking in the Word Bank’s Political Stability indicator.
These favourable economic developments are expected to continue over the medium term. According to the projections of the Bank of Greece, the interest rate-growth differential of the Greek economy will remain favourable in the medium term, as the implicit interest rate, including deferred interest payments, is expected to fall short of nominal GDP growth. With fiscal risks remaining contained, Greek government bond yields rise in line with inflation, as is the case with German bond yields, which suggests that we can expect these favourable debt dynamics to be sustained in the years to come.
In my view, further progress towards a single-A rating before 2030 requires continued improvements in the quality of institutions. In the short run, recent reforms in public administration should gradually be reflected in the country’s improved scores in institutional indices also monitored by rating agencies.
Important steps forward have been made in the judicial system as well. The reform of Greece’s judicial map has already produced tangible results: according to the JustStat database, the average time to a first-instance decision has fallen by more than half, namely to about 1 year (357 days), from more than 2 years (774 days) before the reform. The Greek Ministry of Justice expects the time required for a final judgment to converge towards the European average by 2027. These improvements matter to investors. Faster and more predictable judicial proceedings strengthen legal certainty and enhance investor confidence.
But, above all, what we are witnessing in Greece is a change in mindset. During the crisis, ratings were often viewed primarily as an external constraint; today, they are increasingly used as an input into financial market analysis and investment decisions. Moreover, instead of questioning the necessity to achieve rating upgrades, a growing number of Greek companies now aims to get positive rating assessments that will broaden their access to market-based financing. This shift can help diversify funding sources for the Greek economy, particularly as Europe advances the Savings and Investments Union.
More broadly, the recent past has clearly shown that we need to promote the European project. And to do so we need views and assessments about European economic developments that are independent of foreign geoeconomic influences. In this spirit, Scope’s Annual Reunion in Athens is particularly well-timed, and I am delighted to welcome here today Europe’s first, Eurosystem-eligible, credit rating agency.
Thank you.