Stournaras: bond markets price Greece closer to single-A than to BBB sovereigns

Victoria Shinder12 October 2026, 08:302 min read

Yannis Stournaras, Governor of the Bank of Greece, set out in Athens on 24 September how far market perceptions of Greek sovereign risk have moved — and what he thinks a further rating upgrade depends on. The BIS published the speech, given at the annual reunion of the rating agency Scope Ratings, on 7 October.

Where the euro area stands. Stournaras said the euro area economy has shown resilience amid the energy shock from the Middle East conflict: real GDP grew 1.2% year on year in the second quarter of 2026, with employment still rising, helped by a resilient labour market, external demand linked to the global AI boom, and higher defence and infrastructure spending. He noted that euro area sovereigns with weaker fiscal positions or more political uncertainty have seen spreads widen more than others, and argued that the euro area's statutory independent central bank helps insulate long-term yields from fiscal-dominance concerns — at a time when, he said, central bank independence is being questioned in some advanced economies outside Europe.

Greece's numbers. Greek real GDP grew 1.9% year on year in the second quarter, above the euro area average. Before Greece regained investment grade in 2023, Bank of Greece research estimated that the upgrade would cut Greek spreads over German Bunds by about 70 basis points. Stournaras said spreads are now about 60 basis points lower than on 4 August 2023, when Scope became the first agency accepted by the Eurosystem to rate Greece investment grade. Since the start of this year, despite volatile global bond markets, Greek spreads have widened only modestly.

What the market says. The Bank of Greece has built tools to extract perceived credit risk from Greek bond prices. By that measure, Stournaras said, Greece is priced closer to A-rated sovereigns than to BBB-rated ones. He was explicit that this is not a prediction of rating decisions, but an indication of how much perceptions have changed. Bank of Greece research finds ratings so far consistent with fundamentals: sustained fiscal surpluses, a falling debt ratio and lower political risk.

Debt dynamics. Bank of Greece projections keep the interest rate–growth differential favourable over the medium term: the implicit interest rate on Greek debt, including deferred interest, is expected to stay below nominal GDP growth, which supports a continued fall in the debt ratio.

What a single-A rating needs. In his view, reaching single-A before 2030 requires better institutions. He cited judicial reform: the average time to a first-instance decision has fallen from 774 days to 357, according to the JustStat database, and the justice ministry expects time to a final judgment to converge to the European average by 2027.

Source: BIS, speech by Yannis Stournaras, Athens, 24 September 2026 — https://www.bis.org/speeches/20261007-european-project-role-rating-agencies-and-prospects-greek-economy