IMF involvement in Italy 'reassuring', says Dutch pensions giant PMT
NETHERLANDS - The €39bn metal scheme PMT has applauded the announcement that the International Monetary Fund (IMF) is getting involved in solving Italy's financial problems.
Earlier this week, Italy agreed to allow the IMF to monitor its progress in reducing its sovereign debt.
Guus Wouters, chief executive at the industry-wide pension fund for metalworking and mechanical engineering, said: "Such a dyke guard is a reassuring measure against the potential domino effect from Italy defaulting."
According to Wouters, PMT has been offloading government bonds for the PIGS countries since early 2010.
He also stressed that his scheme had emergency plans in place in the event that the euro crisis escalated.
But he declined, however, to provide further details, adding that he "did not want to speculate about what might happen".
He also added that PMT did not yet have a clear view on the European Financial Stability Facility (EFSF), "as we still don't know all details".
He said: "Only if we know the conditions can we assess whether investing in the EFSF fits within our risk profile."
The metal scheme's director said he had mixed feelings on the direction of German government bonds, highlighted recently by Mercer.
"Investors are flocking to the safe havens of German and Dutch government bonds, causing the interest rates to decrease," he said.
"However, in such a strained situation, rates can go up as well, and therefore it is very difficult to draw sensible conclusions."
Wouters said he did not know whether euro bonds would be an alternative for US Treasuries or provide a "deep and liquid euro bond market" as Angelien Kemna, CIO at APG, recently suggested.
"We can only have an informed opinion on the issue, once all euro countries are sticking to the recent EU agreement on budget discipline, and have their house in order," he said.