I’m trying my best this morning to understand Greece’s announcement that it will set up a new “sovereign wealth fund“. A country that had a 2010 budget deficit of 10.5% and public debt in the range of 140 percent of GDP will be the next country to join the SWF club? (Cue vigorous head scratching).
In case you missed it, Finance Minister George Papaconstantinou unveiled a new SWF this morning that will hold state assets in a sort of privatization queue. The new fund will facilitate the sale of roads, ports, bridges and any other state assets to help stave off sovereign default and restructuring.
Whatever Greece calls this new finance vehicle (and I’m inclined to call it something other than a sovereign wealth fund), it’ll have a very difficult road ahead.
This post originally appeared on the Oxford SWF Project website.