Europe Finally Gets It, El-Erian Says
Pacific Investment Management Co.’s Mohamed El-Erian
T.J. Kirkpatrick/Bloomberg
Pacific Investment Management Co.’s Mohamed El-Erian said, “What I learned in Washington is that Europeans finally get it.”
Pacific Investment Management Co.’s Mohamed El-Erian said, “What I learned in Washington is that Europeans finally get it.” Photographer: T.J. Kirkpatrick/Bloomberg
Sept. 27 (Bloomberg) -- Mohamed El-Erian, chief executive officer and co-chief investment officer at Pacific Investment Management Co., discusses the prospects of a Greek default, the euro-zone debt crisis and the U.S. economy. El-Erian, speaking with Betty Liu on Bloomberg Television's "In the Loop," also talks about financial markets and Federal Reserve policy. Source: Bloomberg)
Policy makers in Europe now understand the severity of the sovereign-debt crisis and the actions that need to be taken, according to Pacific Investment Management Co.’s Mohamed A. El-Erian.
“What I learned in Washington is that Europeans finally get it,” El-Erian, chief executive and co-chief investment officer at the world’s biggest manager of bond funds, said in a radio interview today on “Bloomberg Surveillance” with Tom Keene and Ken Prewitt. “They recognize they have deep problems and they recognize they need to do something about it. And now they are going back and will try to do something about it. This was a very important wake-up call for Europe.”
Euro-region finance chiefs committed at a gathering of the Group of 20 in Washington on Sept. 22 to boost the flexibility of their rescue fund and “maximize its impact” by the time of the next G-20 conclave. Euro-area finance ministers meet Oct. 3. European Central Bank officials have indicated they will consider expanding liquidity provisions when they meet Oct. 6.
U.S. Treasury Secretary Timothy F. Geithner set the tone at the annual meeting of the International Monetary Fund and World Bank by warning that failure to combat the Greek-led turmoil threatened “cascading default, bank runs and catastrophic risk.” That gathering followed the G-20 session.
“But let’s not underestimate both the political challenges and the engineering challenges,” El-Erian said. “There is a lot that has to happen just today.”
To contact the reporter on this story: Liz Capo McCormick in New York at emccormick7@bloomberg.net
To contact the editor responsible for this story: Dave Liedtka at dliedtka@bloomberg.net
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