Members of the euro area may change in coming years even as the union survives, Pacific Investment Management Co.’s Richard Clarida said.
“You have to distinguish between the euro and the constituent countries that make up the euro area,” Clarida, a global strategic adviser for Pimco, said at a conference on the European debt crisis held by Bloomberg Link in New York today. “I believe the euro survives.” The 17-nation area could have “some new names in three years and there could be some existing countries that are no longer in it.”
The European Commission, the 27-nation European Union’s executive branch, joined the European Central Bank earlier this month in calling for additional steps to combat the sovereign debt crisis, urging agreement by early February. EU leaders are scheduled to meet in Brussels on Feb. 4.
David Gordon, head of research at Eurasia Group, a New York-based political-risk analysis firm, said robust growth in Germany could “lift all boats in Europe.”
Europe continues “to be in this cycle where you have buildup of pressure, small actions, fall behind, and they don’t get ahead of it,” Gordon said. “And I think we’re still very much in a place in which it’s a very ad-hoc response.”
John Ryding, chief economist at RDQ Economics LLC in New York, predicted that Europe would eventually reach a “more organized workout, probably with more contributions from Germany.”
Clarida, of Pimco, said he thinks Europe will be out of the debt crisis in “2013 or so.” Newport Beach, California-based Pimco manages the world’s biggest bond fund.