Europe risks wasting more money for nothing if it keeps pumping billions into the ailing Greek economy, the head of Pimco, the world's largest bond fund, said in an interview published on Sunday.
After a year, every indicator has unfortunately worsened, despite the incredible quantity of financial assistance, Mohammed El-Erian told Italy's Corriere della Sera daily,
All of this has terrible human consequences and it's associated with a transfer of liabilities from private creditors to European taxpayers. Why? Very little is being done to deal with the excess of public debt, and the conditions for higher growth are not being put in place, he said.
Further on, if this approach is kept up, more money will be wasted to save private creditors and the risk of a disorderly restructuring of the debt will be greater.
El-Erian's comments follow a promise by Germany and France last week to continue funding Greece in the hope of winning enough time to stave off a messy default which would have potentially drastic consequences for the euro zone.
The European Union and the International Monetary Fund have pledged a new bailout package worth 120 billion euros ($171.8 billion) on condition that Athens produces credible reforms to restore its crippled public finances.
(Writing by James Mackenzie; Editing by David Hulmes)