• 10 tips to find bargains

    Susan Erasmus gives advice on how bargain hunters can get the most bang for their buck.

  • Inside Labour

    Labour's bitter breaches need to be seen in historical context, says Terry Bell.

  • Rich getting richer

    Economists differ on how to tackle the chasm between rich and poor, says Leopold Scholtz.

See More

El-Erian: Portugal may be the next Greece

Mar 19 2012 12:38 Reuters

Related Articles

Spain pressed to cut deficit, Greece gets aid

Eurozone to sign off Greek cash, grill Spain

Threat of Greek default fades

Lagarde thanks private sector

Greece averts default with bond success

Moody's cuts Cyprus debt ratings

Frankfurt - Bond fund giant Pimco's chief executive said he expected Portugal to be the next eurozone country to falter, according to an interview in German weekly Der Spiegel.

Asked whether he expected Portugal to have become the next Greece by the end of this year, Mohamed El-Erian told the magazine: "Yes, unfortunately that will be the case".

Portugal's economy is forecast to contract 3.3% this year - its deepest slump since the 1970s - as the government implements austerity measures under a €78bn (£65bn) bailout from the European Union and International Monetary Fund (IMF).

El-Erian, also co-chief investment officer of Pimco, said he expected Portugal's first bailout package will be insufficient, prompting it to ask the EU and IMF for more money.

"Then there will be a big debate about how to split the burden between the EU, creditors, the IMF and the European Central Bank. And then financial markets will become nervous because they are worried about private sector participation," he told the magazine in an interview published on Sunday.

El-Erian said this year would show whether the eurozone will fall apart or become a smaller but stronger entity, with the first option being "less likely but definitely not to be ruled out".

He expected the eurozone could emerge from its crisis very quickly if its members "finally took the initiative".

"There is a lot of money waiting on the sidelines to see what happens. A lot of money," he said, adding executives would start investing again as soon as there was clarity on how the situation in the eurozone will develop.

Pimco, with $1.36 trillion assets under management, is a unit of German group Allianz that is largely autonomous.

Asked about talk that Pimco could be spun off from its parent, El-Erian said: "That is total nonsense."
eurozone debt crisis  |  greece  |  portugal


Read Fin24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
Add your comment
Comment 0 characters remaining

Company Snapshot

Brought to you by BizNews

More from BizNews

We're talking about:


Johannesburg has been selected to host the Global Entrepreneurship Congress in 2017. "[The congress] will ensure that small business development remains firmly on the national agenda and the radar screen of all stakeholders, the Small Business Development minister said.

10 most expensive cars In the world

This is car porn at its best!


Luxury living

Seven of the most expensive children's toys ever made
5 millionaires turned murderers
The youngest billionaires in the world and how they made it
Watch: Flying first class has never been this luxurious!

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...

Voting Booth

How do you see your boss? He/sheis:

Previous results · Suggest a vote