Countries’ needs for borrowed capital in the coming years will be great. They will need additional funds to: cover the huge costs of the green transition, deal with the coming stagflation, subsidize high energy prices, invest in artificial intelligence and other new technologies, deal with increasingly frequent natural disasters, increase defense expenses etc.
However, these funds will have a significant cost. But, the acquisition of the investment grade for our country will reduce the cost of borrowing under certain conditions.
For our country, the investment grade means that:
- The country’s risk of default is significantly reduced
- The collateral of Greek banks will be accepted by the ECB
- Greek bonds will be accepted with the same “haircut” as those of other countries for refinancing
- new issues of both government and corporate bonds will be in demand due to reduced risk despite lower yields
- the stock market will also be upgraded to the developed category and the money flows to the country will increase even more.
