Crisis-racked Greece has become the first country to face the threat of relegation to emerging market status from the elite league in MSCI's equity indices, although the index provider said on Thursday any such move is unlikely before 2014.

Analysts reckon moreover that any downgrade would happen only if Greece exits the euro, a scenario the country's new coalition government is keen to avoid. 

MSCI, which has $7 trillion benchmarked against its indices globally, said on Wednesday that Greece was no longer in line with developed markets' size requirements. It also said Greek
authorities had failed to address concerns over certain kinds of transactions.

"The Greek equity market has experienced sharp declines, which are of course associated with the situation in Greece, the economic situation. The market has shrunk quite significantly," Dimitris Melas, MSCI's executive director, told reporters.

MSCI criteria for classification include investor access, as well as market size and liquidity, and the country's overall wealth. While the currency is not a criteria, Greek per capita
income of $25,000 is significantly above MSCI's cut-off for emerging markets.

[Source Reuters]