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Greece’s ongoing budget woes have been one of the major stories of 2010, sending shock waves throughout the euro zone (and global equity markets in general). After months of back-and-forth, some “doomsday” predictions, and even death sentences for the eurozone common currency, recent developments suggest that the risk may finally be abating for the small nation.

Greece’s most recent austerity package, valued at more than $6 billion and went into effect last week, is designed to get the budget deficit down to a manageable level as quickly as possible. The package includes cuts to civil servants’ pay, pension freezes, and consumer tax hikes (including a sales tax hike from 19$ to 21% this week.

Although the programs have met stiff resistance from powerful Greek unions and other organizations, international agencies have praised the steps. The EU backed the plan, while Standard & Poor’s affirmed the nation’s BBB+ long-term credit rating and removed it from their credit watch list.”We view the government’s fiscal consolidation program as supportive of the ratings at their current level, hence our rating affirmation,” said Standard & Poor’s credit analyst Marko Mrsnik in a news release.

As interest in Greece’s financial markets has surged, many investors have gone in search of a Greece ETF. While there’s currently no pure play option, most European ETFs have small allocations to the country.

However, for investors truly craving Greek exposure, one interesting option is the Claymore/Delta Global Shipping Index ETF (NYSEARCA:SEA), which allocates nearly 20% of its assets to Greece. While obviously not a majority of the assets in the fund, this 18% allocation is the closest choice investors have on the market today to access Greece.

SEA’s Greek exposure is significantly higher than any European ETF. The iShares S&P Europe 350 Index Fund (NYSEARCA:IEV) allocates just 0.4% of its assets to Greece, while the Vanguard European ETF (NYSEARCA:VGK) allocates a slightly higher 0.7% to the nation. In fact, one of the only European ETFs to offer any real exposure to Greece is the iShares MSCI Europe Financials Sector Index Fund (NASDAQ:EUFN), which has 2.7% of its securities in Greece.

SEA follows the Delta Global Shipping Index, a benchmark that tracks the performance of companies that derive a significant portion (in excess of 80%) of their revenues from the seaborne transport of dry bulk goods or the leasing and operation of tanker ships. The index underlying SEA utilizes a modified dividend weighting methodology, meaning that shipping stocks paying higher dividends are generally given a higher weighting (although the maximum allocation to a single security is capped at 4%). The fund currently contains 30 securities which are spread out in countries around the globe, including almost 13% to the U.S. and nearly 10% each to Japan, Bermuda, and Hong Kong. SEA charges an expense ratio of 0.65% and is up 15% this year, among the best performers for equity funds in 2010.

SEA

Disclosure: no positions at time of writing

Source: SEA: The Closest Thing We Have to a Greece ETF