Greece retains capacity to service debt, European Commission report says

Greece retains the capacity to service its debt, the European Commission has said in its fourth post-program surveillance report released on Wednesday.

"Greece retains the capacity to service its debt. Greece was upgraded to investment grade by a third major rating agency in December 2023. According to the debt sustainability analysis, Greece is deemed to face low risks in the short term, high risks in the medium term and low risks in the long term," the report's executive summary said.

"Government gross financing needs for 2024 and 2025 are low, on the back of projected primary surpluses and moderate debt amortization, which is also due to the earlier partial pre-payment of the Greek Loan Facility.

"Greece retains a sizeable cash buffer and has maintained continuous market access amidst narrowing yield spreads following recent upgrades to investment grade."