* Greece displaces Venezuela as riskiest sovereign credit
* Four euro zone states in top 10
* Belgium is quarter's worst performer
By Sujata Rao
LONDON, Jan 7 (Reuters) - Greece topped a list of countries seen as most likely to default on debt, while fellow euro zone member Spain also joined the ranks of the riskiest sovereign debtors in the fourth quarter of 2010, CMA Datavision said.
Two other peripheral euro zone states, Ireland and Portugal, rose higher within the top 10, while core members of the 16-country bloc were among those who saw the cost of insuring their debt against default rise most sharply.
"The top five worst performers for the quarter are from Western Europe, confirmation that 2010 was one of the most difficult years for the region since the introduction of the euro in 1999," the data provider said in a report.
The cost of insuring Spanish debt against default or restructuring rose by over 50 percent, placing it seventh on the list of the 10 riskiest sovereigns, CMA said in the report, which was released late on Thursday.
The rankings are based on CMA's calculations, which include the cumulative probability of default.
Ireland and Portugal each saw their rankings on the risk-list rise several notches in the quarter, to third and fourth place respectively.
Greece, which received a 110 billion euro European Union-led bailout last May, pipped Venezuela as the world's riskiest sovereign. It had been in the list's top 10 throughout 2010.
Greek five-year credit default swaps were quoted at 1,026.5 basis points at year-end, meaning it cost just over $1 million to insure exposure to $10 million of Greek debt over a five-year period. The CDS rose 32 percent in the fourth quarter, CMA said.
WESTERN EUROPEAN RISK UP
The final quarter's worst performer was Belgium, whose CDS widened to 219 bps -- a rise of 70.4 percent -- due to its high debt and paralysed government. It was followed by Spain and Germany, both of which saw CDS rise over 50 percent, while Dutch and French debt insurance costs jumped by over 35 percent.
Debt insurance costs for Western European sovereigns as measured by the benchmark Markit iTraxx CDS index have risen above those of emerging Europe for the first time, after the euro debt crisis fuelled a rise of almost 140 bps last year.
Emerging markets performed better, with Ukraine's debt insurance costs falling the most over 2010 -- by 59 percent, CMA said. It ended the year as the sixth riskiest sovereign.
Argentine CDS eased nearly 20 percent over the quarter as the country started moves to restructure defaulted debt, while Romanian debt insurance costs fell by 17 percent in the last three months of 2010, allowing it to leave the top 10 list.
But European Union member Hungary, with its high public debt-GDP ratios and controversial policies, entered the ranks of the riskiest sovereign debtors at ninth place, its debt insurance costs up 18 percent over the quarter.
Among the least risky sovereigns, Norway, Finland and Sweden topped the ranks again but the Netherlands fell out of the top 10 as its debt insurance costs rose. Saudi Arabia was the new entrant to the group, coming in at 10th place.
The debt risk profile of Germany worsened, coming in at ninth place on the least risky list -- down four notches. The United States, however, improved its position, jumping from ninth to fifth place, benefiting from the Federal Reserve's plan to pump $600 billion to kickstart the economy. (Editing by Catherine Evans)