Norway may help euro zone if asked

Norway may help euro zone if asked
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Norway says it would consider using some of its North Sea oil wealth to strengthen the euro zone rescue fund if asked.

Norway’s finance minister Sigbjoern Johnsen said they would deal with any such request in a “serious and thorough manner”.

“Investing in bonds issued by the EU’s EFSF crisis fund lies within the mandate that the Government Pension Fund has today,” Johnsen said, adding that any investment decision would be up to the fund’s managers.

The arm of Norway’s central bank that manages the country’s sovereign wealth fund — known as the Government Pension Fund — said it would apply the same risk and profitability standards to any such placement as it does to its other investments.

The European Financial Stability Facility wants sovereign wealth funds to supply collateral so it can borrow money for purchasing Italian or Spanish government bonds on the secondary market.

Thanks to taxes on oil and gas, ownership of oil fields, and its stake in energy company Statoil Norway has built up an investment fund the equivalent of nearly 400 billion euros.

However, the idea might prove a hard sell to countries with national wealth to invest.

China already has an estimated 600 billion euro exposure to euro zone debt, courtesy of the 25 percent or so of its $3.2 trillion of foreign exchange reserves that analysts believe to be invested in euro-denominated assets.

Many analysts now say there are better ways for China to support Europe and its own economy than simply buying up high risk debt from euro zone governments struggling to stay solvent.

Rich gulf state Qatar may be reluctant to participate because it already has substantial exposure to Europe, while Russia’s Prime Minister Vladimir Putin said earlier this month the euro zone has the resources to resolve its problems without help from the major emerging economies.

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