Prime Minister Kyriakos Mitsotakis is embarking on his second term in office with a firm commitment to implementing reforms and leaving Greece's crisis years behind. With a strong majority backing his conservative administration, Mitsotakis plans to accelerate the country's debt reduction, stimulate economic growth, and attract foreign investment.
In a significant move to signal his dedication to investors, Mitsotakis pledged to repay €5.3 billion ($5.8 billion) of bilateral bailout loans from European countries ahead of schedule. This commitment, along with other planned reforms, aims to restore Greece's investment-grade credit rating by the end of the year. If successful, this would be a major milestone for Greece, as it has been the only junk-rated issuer in the euro area for the past 13 years.
In an interview with Bloomberg Television, Mitsotakis outlined his objectives for the next four years, focused on consolidating Greece's position within the European Union and bringing Greek incomes closer to their European counterparts. He also emphasized his commitment to renewable energy and increasing exports to boost the country's gross domestic product.
Mitsotakis stated, "This is not just about management or playing defense. It's about changing the country." His resounding election victory has provided him with the mandate to implement investor-friendly policies and chip away at Greece's staggering debt, which currently stands at €356 billion, the highest relative to GDP in the euro area. The prime minister expressed his determination to build a new political consensus in the center ground of Greek politics, steering away from populism and appealing to a broader range of voters.
The positive credit outlook stemming from Mitsotakis's electoral win has already attracted investors to Greek bonds, making them the best performers in the developed world. This surge in demand has lowered Greece's borrowing costs to the point where it now pays less interest than Italy, despite Italy being considered less risky by rating agencies.
While acknowledging that Greece is already trading as if it is an investment-grade country, Mitsotakis stressed the importance of official recognition by rating agencies. Moody's Investors Service and Scope Ratings have both regarded his electoral victory as credit positive for Greece.
Beyond economic reforms, Mitsotakis also outlined his plan to divest stakes in Greek banks and proceed with the long-awaited initial public offering of Athens International Airport in early 2024. These actions will further attract foreign investment and contribute to the economic growth of the country.
Under Mitsotakis's leadership, Greece has made significant strides in recovering from the economic crisis. Gross domestic product has rebounded, unemployment has halved, and the stock market has surged. By outlining detailed plans and goals for the future, the prime minister aims to build on these successes and ensure a brighter and more prosperous future for Greece.