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Agency raises Greece credit rating

Moody's ratings agency has upgraded Greece's government bond rating, predicting a gradual decline of its massive national debt.

The agency is also citing a continued commitment by the bailed-out country's conservative-led government to improve public finances.

Moody's said it had raised the Greek rating by two notches from Caa3 to Caa1 - still below investment grade.

Greece is set to emerge from recession this year for the first time since 2008 after being rescued by an international bail-out four years ago and imposing years of severe austerity measures.

"The first factor behind the upgrade of Greece's rating is Moody's strengthened expectation that the general government debt to GDP ratio will start declining in 2015, after peaking this year according to Moody's estimates at around 179% of (gross domestic product)," the agency said.

"Moody's considers that Greece's fiscal outlook is more resilient than in the past."

The action follows a similar move made by rating agency Fitch in May.

Greece was rescued from the brink of bankruptcy in 2010 by an international bail-out that was eventually worth 230 billion euros (£183bn).

But rescue creditors from other eurozone countries and the International Monetary Fund forced the country to make drastic spending cuts that have seen levels of poverty and unemployment soar.

MPs began debating legislation this week to overhaul Greece's tax administration - reforms due to be voted next week and demanded by creditors for the country to continue receiving bail-out loan installments.

"Fiscally, we have already taken most of the beating, but the road ahead remains tough," finance minister Gikas Hardouvelis said.

Jean-Claude Juncker, president-elect of the European Commission, will visit Athens on Monday in his first trip since his election by the new European Parliament last month.

He is due to meet Greek prime minister Antonis Samaras, a fellow conservative, to express support for the country's ongoing effort to make its public finances sustainable.

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