Agustino Fontevecchia
May 02, 2012

Greece has emerged from default, according to credit rating agency Standard & Poor’s. The beleaguered Hellenic Republic managed to execute a controversial debt restructuring back in March that allowed it to ease short-term funding pressure, as the political ranks tried to implement tough austerity measures.

Regardless, the most distressed of the PIIGS faces a steep hill, with debt-to-GDP expected to remain north of 160% over the coming years, GDP forecast to contract by a further 5% this year, a high current account deficit, and weakening political consensus. Parliamentary elections, set for May 6, will pave the way for the next phase of Greece’s fateful attempts to pull itself from the precipice.

S&P has raised its credit rating for the Hellenic Republic, Greece’s official name, to CCC from SD (selective default). While the country’s debt is still considered junk, S&P noted the successful completion of the private sector involvement meant Greece is no longer in default, despite the fact that nonparticipating creditor debt might remain unpaid. Untendered bonds will keep their D (default) rating until the next principal payment on May 15.

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