[Indicative templates] Athens Digest 10.03.2025

-Government beats censure challenge, rules out early election

-Latest polls: Support slips for both New Democracy and main opposition amid Tempe protests

-DBRS upgrades Greece’s credit rating on fiscal progress and banking recovery

-At 2.3 percent, Greece’s economic growth outpaces EU average

-Interview: Carla Tavares EU budget co-rapporteur warns against diverting next MFF cohesion funds for defence

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The government has firmly ruled out calling a snap election after parliament rejected a censure motion with 157 votes against the proposal in the 300-seat legislature. Tabled by opposition parties, the motion followed nationwide protests over the government’s handling of the 2023 Tempe rail disaster that killed 57 people. “Beyond political confrontation, the question is how we move forward to implement what the majority of citizens who participated in the large rallies demanded,” PM Mitsotakis said. “That majority will judge us again in 2027 based on what we have accomplished,” he added. The prime minister is reportedly mulling a cabinet reshuffle in the coming days.

New Democracy is holding its position as Greece’s dominant party despite losing ground amid demonstrations over the Tempe rail disaster, according to a new MRB poll. The ruling conservative party dropped to 26.7 percent, down from 27.9 percent in the previous survey. The main opposition party also recorded losses, the center-left Pasok falling to 15.4 percent from 16.4 percent. The exception was the far-left Course for Freedom, which surged to 12 percent from 7.4 percent, while the right-wing Hellenic Solution rose to 11.4 percent from 9.5 percent. Left-wing Syriza continued its downward trend, registering just 8 percent support compared to 8.4 percent previously. The Communist Party, KKE, slipped to 9 percent from 9.4 percent. Voice of Reason saw the most dramatic decline, falling to 4.7 percent from 8 percent. Other parties polling above 3 percent include Mera25 and Niki at 3.1 percent each, while the Movement for Democracy dropped to 2.7 percent from 4 percent.

The ratings agency DBRS raised Greece’s credit rating to ‘BBB’ from ‘BBB low’ while changing the outlook from positive to stable, citing reduced banking sector risks and continued improvement in government debt ratios. “The upgrade reflects Morningstar DBRS’ view that legacy risks in the banking system have receded along with a continuation in over performance in fiscal targets,” the agency said. Greece’s national debt has fallen sharply to 154 percent of GDP last year and is on track to drop below 140 percent by 2027. The latest upgrade continues a series of positive rating actions for Greece since autumn 2023, when the country returned to investment grade after 13 years. S&P Global Ratings and Fitch have also upgraded Greece, with Moody’s remaining the only major agency still rating the country below investment grade.

New Eurostat figures reveal Greece achieved 2.3 percent economic growth in 2024, significantly outperforming both the European Union average of 1 percent and the eurozone’s 0.9 percent expansion. The Greek economy reached EUR 201.5 billion in volume, up from EUR 197 billion in 2023, exceeding analysts’ expectations. This robust performance was primarily fueled by strong consumer spending and increased investment activity during the final quarter of the year. According to the Eurostat data, Greece’s economic performance ranks among the strongest in Europe, with only seven EU countries recording higher annual growth rates.

On our Radar: “We cannot demand more with the same money”
In a discussion with Athens Digest’s John Papageorgiou published (Greek version) on the Greek finance new site insider.gr, Carla Tavares, co-rapporteur on the post-2027 Multiannual Financial Framework (MFF) in the European Parliament’s Budget Committee, emphasizes that “we cannot demand more from the Union with the same money.” She underscores the need to keep common loans as an option and describes the European Commission’s proposal on defence budget as “a first step, given the circumstances.” However, she firmly insists that Cohesion Funds of the next MFF should not be redirected toward defence, warning that “every time a crisis strikes, we cannot turn to Cohesion Funds.