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Greece Rating Upgraded Out of Default

After many months of hardship Greece appears to finally be heading in the right direction after credit rating agency Standard & Poor upgraded the EU members government debt rating.

The move by Standard & Poor has seen Greece upgraded from a rating of “selective default” to “CCC” on the back of Greece completing the largest debt restructuring in history.

S & P Said:

“While the exchange has, in our view, alleviated near-term funding pressures, Greece’s sovereign debt burden remains high.”

Greece has been bailed out twice.

The news of the credit upgrade arrives on the the back of two debt bail outs. The first in 2010 saw Greece receive loans totalling 110bn euros and, after a further restructuring of debt, an additonal 130bn euros was loan from the Eurozone and the International Monetary Fund in March of 2012.

The rating of CCC means, according to S&P, that Greece is “currently vulnerable and dependent on favourable business, financial and economic conditions to meet financial commitments” and follows rival agency Fitch who also raised its rating of Greece out of default in March.

S & P went on to say:

“The fiscal consolidation underway is largely premised on tax hikes and improved tax collection, an extensive privatisation programme, and wholesale cuts in government spending.”

“We believe this adjustment has implementation risks given the likely further contraction of the sovereign’s GDP this year and next, which will likely result in persistent social pressures.”

Whether Greece continues to remain on the road to debt recovery remains to be seen.