About that debt crisis: never mind

The poster child for global economic instability appears, against all odds, to be making a comeback.

After four years of recession, Greece is looking attractive to investors who are gaining confidence in its gradual turnaround, which some analysts predict could lead to economic growth as early as next year.

The credit-rating agency Fitch upgraded the country’s sovereign debt from CCC to B- on May 14. That’s still a junk rating, but it’s an important vote of support for Greece’s aggressive austerity program. The Athens stock market, meanwhile, is up 80 per cent this year and Greek government and corporate bonds are suddenly being snapped up as fears of a “Grexit” from the eurozone fade.

Fitch wasn’t exactly effusive in its praise, however. It warned that, in Greece, “tangible economic recovery remains elusive, while resistance to reform is high.” The country has been hit by massive protests against government cuts, while the unemployment rate reached 27 per cent this year. The country’s debt levels also aren’t yet sustainable, Fitch said, and they’ll only get there if the recovery continues and a budgetary surplus is achieved, as planned, this year.