Viewpoint: many more chapters left in the Greece drama
PIMCO CEO and co-chief investment officer Mohamed El-Erian had this to say about the crisis in Greece: By any standard, Sunday’s loans announcements on Greece were bold and unprecedented, and understandably so given the high stakes for Greece, Europe and the global economy. But will these announcements mark a turning point in the debt crisis that erupted in Greece and is already contaminating other European economies? Let us start with the good news. The Greek government has committed itself to a massive fiscal effort (in the range of 11% of gross domestic product). Europe and the International Monetary Fund have committed to disburse serious funding (€110bn or US$143.4bn). And these three parties are finally expressing the vocal solidarity that has been required for a while. This is all necessary; but is it sufficient for long-term effectiveness? That depends on where you come out on a few important design and implementation issues.