Majority see debt restructuring
Pension funds and other institutional investors believe Greece and other troubled European countries will be forced to restructure or default on their debt within the next three years, according to research results made public on Monday.
A survey of more than 1,000 institutional investors by Barclays Capital found 50 percent predict a restructure, with a further 24 percent believing it was a ?low-probability event.?
The survey also found the majority of institutional investors believed the biggest change in the investment outlook since December had been the political upheaval in the Middle East and North Africa.
This contrasts with the 18 percent of investors who thought inflation and potential policy normalization in advanced economies were the main market developments since the last quarter. Equity investors viewed an oil price shock as the biggest risk.
Greek bonds rose on Monday, pushing the 10-year yield to the lowest in two weeks. The yield on the Greek 10-year note dropped four basis points to 12.25 percent.
The head of the Federation of Greek Industries (SEV), Dimitris Daskalopoulos, said on Monday that the opportunity recently given to Greece by fellow eurozone governments provided Athens with a last chance to get on top of its massive debt pile.
?If we continue to act slowly, then Europe and the markets will turn their backs on us for good,? he told a conference in Athens. ?Time given to us on March 11 is the last chance for a new start,? he added.
The EU summit earlier this month extended the payment period of Greek loans under an EU-led bailout package by four years, as well as reducing interest rates for Greece by 100 basis points.
In exchange for the more favorable terms, the Greek government promised to complete a 50-billion-euro privatization plan by 2015. The final details to the revamped aid to Greece are expected to be ratified at Friday?s EU summit.
The country is at a crucial crossroad and the ruling Socialists need to prove whether they have the will power and ability to push through reforms, added Daskalopoulos.
