The rating agency announced that it placed its ΄B/B΄ long- and short-term sovereign credit ratings on Hellenic Republic on CreditWatch with negative implications. As per the same announcement, the CreditWatch placement reflects S&P’s view that some of the economic and budgetary policies advocated by the newly elected Greek government, led by the left-wing Syriza party, are incompatible with the policy framework agreed between the previous government and official creditors. 

According to S&P, if the new Greek government fails to agree with official creditors on further financial support, this would further weaken Greece΄s creditworthiness and potentially trigger ratings downward revision.

As per the rating agency, Greece relies on official financing to meet its expected central government debt redemptions of c€17bn this year, including €6.7bn owed on commercial debt held by the ECB and euro area central banks under the now discontinued Securities Market Program and €8.6bn owed to the IMF. 

As the technical extension of the EFSF΄s Economic Adjustment Program for Greece ends on February 28, S&P would expect a continuation of this extension to enable the new government to negotiate changes in some of the program΄s parameters with the Troika.