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Nov. 1 (Bloomberg) -- BankInvest, a Copenhagen-based asset manager, is cutting holdings of stocks and buying longer-dated bonds as a planned Greek referendum raises concern that the euro area’s efforts to contain the debt crisis will fail.
“From a democratic perspective, it’s hard to question Papandreou’s decision, yet the problem will be whether the Greeks can be made aware of what’s at stake,” Chief Strategist Frank Velling at BankInvest, which manages $17 billion, wrote in a report today. “We continue to believe in the euro zone and its ability and willingness to handle the bank and debt crises, though we admit the risk has increased.”
Greek Prime Minister George Papandreou called a referendum on the euro area’s latest bailout package late yesterday, saying voters will give him their support to proceed with economic reforms.
Papandreou’s gambit risks pushing the country into default if voters reject the financial accord. An opinion poll published on Oct. 29 showed most Greeks believe the euro area’s expanded bailout package and debt writedown are negative.
--Editors: Andrew Rummer, Will Hadfield
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