Greek crisis not out of hand, say money managers
08 May 2010
The International Forum of Sovereign Wealth Funds today said the current debt crisis engulfing Greece is resolvable and should be contained, as Greece's position is different to that of other heavily indebted euro-zone countries.
The forum, which was established in 2009 and is facilitated by the International Monetary Fund, is the representative body of the world's sovereign wealth managers and includes among its members some of the most influential investors in the world.
Meeting in Sydney for its second annual meeting, the forum said the Greek fiscal position is worse than comparable countries such as Portugal and Spain.
"One important conclusion we reached is that the situation is resolvable," said IFSWF Chairman David Murray, who is also chairman of Australia's Future Fund which has A$66 billion in assets under management.
"The circumstances in Greece are not the circumstances of some of the other countries. In Greece the level of indebtedness is higher, there was a serious surprise factor on the budgetary and fiscal conditions in that country that was not the case in the other countries that have been talked about," he said at a press conference. "We believe Greece is different from the others and some collective action is possible to resolve this situation."
He said sovereign wealth funds and other long-term institutional investors largely have a stabilizing effect during such crisis as they don't tend to sell the fixed interest securities in their portfolios.
However, the wave of risk aversion among investors triggered by the Europe crisis has led to a "less certain investment environment," the fund said in a communique issued after the meeting.
