Tags: BNTEAMS | BON | BUSINESS | CEN | COS | CRUNCH | DCAA

El-Erian Says There’s Still Time to Solve European Debt Crisis

Saturday, 12 Nov 2011 05:32 PM

 

  Comment  |
   Contact  |
  Print   |
    A   A  
  Copy Shortlink

Pacific Investment Management Co. Chief Executive Officer Mohamed El-Erian said it’s not too late to solve the European debt crisis and that action is needed quickly.

“Europe can no longer kick the can down the road,” El- Erian, whose company manages the world’s biggest bond fund, said in an interview on CNN’s “Fareed Zakaria GPS,” scheduled for broadcast tomorrow.

“The good news is it’s not too late to solve,” El-Erian said. “The bad news is with Italy, the crisis has entered a very dangerous phase.”

This week, Italy’s bond yields surged past the 7 percent threshold that prompted Greece, Portugal and Ireland to seek bailouts. Italy’s parliament gave final approval today to a debt-reduction measure aimed at bolstering investor confidence.

Europe’s fiscal woes have turned into a “global crisis,” IMF Deputy Managing Director Zhu Min said yesterday. Asia- Pacific officials said they were bracing for a deterioration of Europe’s debt crisis that may push the global economy into a recession.

European finance ministers failed earlier this week to bridge divisions over a permanent rescue fund. European Central Bank policy makers said the bank can’t do much more to stem the region’s debt crisis, suggesting they are reluctant to increase bond purchases to lower Italy’s borrowing costs.

Persuade Markets

Italy needs to persuade markets it’s serious about taking actions that will allow the economy to grow, said El-Erian, a former deputy director of the International Monetary Fund.

Asked if a Greek exit from the euro zone might spark panic about Spain, Ireland and Portugal, El-Erian said, “The risk is there.”

“We’ve waited so long that there is no cost-less solution,” he said. “Every solution has enormous consequences, collateral damage and unintended results.”

The European Central Bank can’t quell the debt crisis on its own and “individual countries need to step up their reform effort,” El-Erian said.

Pimco’s Italian debt is “de minimus,’ El-Erian said.

“We were concerned very early on, but people should be generally defensive, but also selectively offensive,” he said.


© Copyright 2014 Bloomberg News. All rights reserved.

  Comment  |
   Contact  |
  Print   |
  Copy Shortlink
Around the Web
Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
Email:
Country
Zip Code:
Privacy: We never share your email.
 
Follow Newsmax
Like us
on Facebook
Follow us
on Twitter
Add us
on Google Plus
Around the Web
Top Stories
You May Also Like

New Date Set for West Bank Outpost Demolition

Thursday, 25 Dec 2014 15:56 PM

An Israeli court ordered the destruction of a settlement in the West Bank in a decision on Thursday that comes a decade  . . .

NYPD Arrests Seven for Threats After Slayings of Two Officers

Thursday, 25 Dec 2014 15:33 PM

At least seven New Yorkers have been charged with making threats against police officers since the Dec. 20 killing of tw . . .

Unions to Recruit Immigrants Covered by Obama Amnesty

Thursday, 25 Dec 2014 15:11 PM

Labor unions are eyeing an estimated four million immigrants who entered the United States illegally as a prize pool of  . . .

Most Commented

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

 
NEWSMAX.COM
America's News Page
©  Newsmax Media, Inc.
All Rights Reserved