The head of the world’s largest bond management firm has warned the euro zone will be unable to fund future bailouts and it will probably force some of its 16 nations to abandon the currency within five years. This includes Ireland. The chief executive of investment management firm Pacific Investment Management Company (Pimco), Mohamed A El-Erian spoke to CNBC.
CNBC: So what are the chances, Mohamed, that there’s no euro in 5 years?
Mohamed A El-Erian: I think small. I think that a bigger likelihood is that the Eurozone – which is now consists of sixteen countries – is smaller. And that that smaller group … (CNBC: “…not as small as one – not like Germany right?”)… no, not as small as one… (CNBC: “…might as well just go back to the Mark, right?”) …not as small as one. I think the Euro brings benefits, but it’s important that the Euro brings benefits to countries that are similar in structure, right now the zone is so heterogeneous, that you have the bad contaminating the good.