The euro crisis continues to provoke speculation about possible outcomes. Yesterday, the Irish Times reported comments made by Mohamed El-Erian, president of the world’s largest investment fund, Pacific Investment Management Company, to American television CNBC, stating that the eurozone’s inability to finance the exit of its members from the crisis will lead some of the 16 countries, including Ireland, to leave the euro within the next five years.
Although official sources assure that Portugal will conclude the queue at the European fund for assistance to struggling eurozone members, El-Erian believes that Spain will likely join it and that the Union has not yet shown that it has taken control of the crisis. – Europeans have failed to bring the crisis under control, which is the first rule of crisis management, namely to be proactive rather than just react to developments – says El-Erian, whose fund manages assets exceeding one trillion dollars. – The lagging behind the crisis will continue as long as – he says – we only think about saving liquidity and until something is done to resolve balance sheet issues. Until then, solvency problems will threaten any hope for recovery – he concluded. (Davorka Zmijarević)
