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Greece Taken Off List of Developed Countries

The latest setback for Greece: MSCI Inc. booted the euro-zone member from its index of developed countries.

The decision, announced late Tuesday, is the first time the index provider demoted a country from its "developed" to its "emerging-market" category since the launch of its flagship emerging-markets index in 1987.

It affirms what investors have believed for years. Multiple bailouts by the European Union and the International Monetary Fund, a sharp contraction in gross domestic product and a still-large debt burden mean Greece now has more in common with Hungary than France.

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