Greek Finance Minister: 'Smart Money' Investors See Greek Debt Sound
By Kejal Vyas Of DOW JONES NEWSWIRES
WASHINGTON -(Dow Jones)- Greek Finance Minister George Papaconstantinou said Saturday that investors who rode out the Mediterranean country's debt and fiscal woes over the past year are feeling a bit of redemption.
"Smart money is beginning to realize that Greek government bonds are now a good investment," the minister said during a press conference at the annual International Monetary Fund and World Bank meetings in Washington.
"Those that stuck it out are seeing some returns," he said.
In April, during the height of the Greek debt crisis that sent shockwaves around global financial markets, Papaconstantinou warned investors that were betting on a default that "they will lose their shirts."
In the last month, Greek officials have been out roadshowing the progress the country has made since the European Union and the IMF approved a EUR110 billion bailout package in May to save the debt-strapped economy.
Greece is slated to reduce its deficit to 7.6% of gross domestic product by the end of 2011 from the 13.6% seen in 2009.
"We're not out of the woods but everyone seems to recognize the progress made," Papaconstantinou said.
Officials also are looking to bring down the risk premium that investors charge to buy riskier Greek debt, before coming back to market with longer-term issues. Ten-year government bonds now yield nearly 10%.
The yields have dropped more than a percentage point in the last month and are "going in the right direction," Papaconstantinou said.
The minister backed his plans to sell so-called diaspora bonds to Greeks living abroad "early next year" and "a return with proper longer-term issues in the market sometime next year," but said that depends on asset-price volatility.
