“We buy and hold -- with caution -- Italian and Spanish bonds,” El-Erian was quoted by the daily newspaper as saying. “It is important to distinguish between individual countries: Spain isn’t insolvent. Italy isn’t insolvent.”
If the Spanish government can convince investors that it is making progress in cleaning up its banking sector, the country won’t need a bailout, El-Erian said, according to Die Zeit.
He also said Europe should enter into a transfer union, in which the region’s northern states subsidize southern states to facilitate needed fiscal reform, Die Zeit reported.
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