The head of PIMCO said on Wednesday that G
reece is far from stabilising its finances and should restructure its sovereign debt, in an article for German daily "Handelsblatt", according to Reuters.
reece is far from stabilising its finances and should restructure its sovereign debt, in an article for German daily "Handelsblatt", according to Reuters.
"So far none of the solutions for the Greek debt crisis have worked. And a lot of people - including me - don΄t believe that they will work in the future," Mohamed El-Erian, chief executive of Pacific Investment Management Company, wrote.
Greece will need "a preferably voluntary and orderly restructuring" to relieve itself of its debt burden, the PIMCO CEO said, adding that Greece’s rescue by the IMF/EU/ECB had not brought the results that were hoped for.
"This means abandoning rescue attempts if they do not and will not work," El-Erian said.
El-Erian admitted though that efforts so far have reduced the risk of contamination for other countries and institutions, however a debt crisis could not be resolved by simply enhancing liquidity, he said: "Just adding new debt to the bulk of already existing debt is not a long-term solution."
source: capital
