IMF and Norway pension managers still believe that Greece is on track. Markets not convinced
|German/Greek Spreads on 6 mo debt|
Norway's pension fund is still buying debt from Greece, Spain and Debt. IMF says that Greece is on track. Capital markets still aren't so sure. Yea, German/Greek spreads came in a bit, but they still indicate major doubts. Last week they were 900, this week they are 880.
Norway’s Prime Minister Jens Stoltenberg said he doesn’t expect Greece to default after the country’s sovereign wealth fund said its long-term investment horizon allowed it to buy up the debt-laden country’s bonds.
“The International Monetary Fund assessment is that they are on track,” Stoltenberg said today in an interview in Oslo. “Of course, they have a long way to go, but they are on track; they have started the adjustments.” Asked whether he expects the country to default he answered “no.”
Norway’s $450 billion Government Pension Fund Global last quarter bought debt from Greece, Spain, Italy and Portugal, it said in August. Finance Minister Sigbjoern Johnsen said last month the fund’s long-term view allows it to take on more volatile holdings and that he supports the risk level in its portfolio. The fund’s Chief Executive Officer Yngve Slyngstad told Bloomberg on Aug. 13 that peripheral European debt represents a good risk-return ratio.