Greece credit rating boosted as talks of cuts stall
Ratings agency Moody's has upgraded Greece's credit rating, citing improved results in the country's economic adjustment program.
The agency announced the two-notch upgrade from C to Caa3 - still well below investment grade - in a move seen as a boost for the government, which has promised to end a crippling recession and return to international markets next year.
The news was announced late on Friday, hours after the government said talks with bailout creditors had hit snags, pushing back negotiations on cost-cutting reforms for at least a week.
Greece is on course to balance its budget before interest payment this year, meeting a central demand by rescue lenders who have kept the country afloat since it lost market access in 2010.
"Based on the government's budget execution record up until October, Moody's believes that the government's deficit target is likely to be within reach," the agency said.
A series of ratings agency downgrades marked the start of the Greek financial crisis, which ultimately led to the country's €240 billion bailout programs from the other eurozone countries and the International Monetary Fund.
Bailout loans came with demands for harsh austerity measures as the unemployment rate surged past 27 per cent. A quarter of the country's output is expected to be wiped out before the recession ends.
Greece is now negotiating with bailout creditors to try and finalise a series of long-term cost-cutting reforms needed to secure future rescue loan payouts.
But European Union-IMF inspectors postponed a trip to Athens next week, as government officials acknowledged that certain issues remained unresolved.
Finance Minister Yannis Stournaras said inspectors from the "troika" of the EU, European Central Bank and IMF would likely travel to Greece the following week.
"We still have not reached an agreement today on several issues," he said. "The aim is to have this concluded by the end of the year."
Greece and rescue lenders remain at odds over austerity measures needed to cover a 2014 budget gap and the course of various long-term reforms including mass public-sector job cuts.
The government is also resisting troika pressure to lift blanket protection measures for distressed home loans.
State hospitals, meanwhile, were operating with emergency staff on Friday as doctors and staff held a 24-hour strike against planned health cuts under the country's austerity program.
Strikers held a protest outside the Health Ministry building in Athens and about 2500 people marched peacefully to parliament.