Moody's lifts Greece to Caa3

Moody's Investors Service said it upgraded Greece's government bond rating to Caa3 from C.

The outlook is now stable. The short-term ratings remain Not Prime.

Moody's said the upgrade reflects the combination of the following key drivers: (a) The significant fiscal consolidation that has taken place under Greece's structural adjustment program despite low growth and political uncertainty. As a result, Moody's expects that the government will achieve (and possibly outperform) its target of a primary balance in 2013, and record a surplus in 2014 in accordance with the adjustment program; (b) the improvement in Greece's medium-term economic outlook supported by a cyclical recovery in the economy and also the progress made in implementing structural reforms and rebalancing the economy; and (c) the significant reduction of the government's interest burden following previous restructurings and official sector repayment assistance.

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