PIMCO Chief Doubts Viability of Greek Debt Deal

Mohamed El-Erian, the CEO and co-chief investment officer at PIMCO, told an interviewer at Bloomberg Radio today that the agreement reached by Greece’s political leaders is “analytically questionable.” What El-Erian means, of course, is that the politicos can agree to all the austerity measures they want, but getting the Greek public on board is a whole different story.

The agreed austerity measures are sure to do little, if anything, that will lead to job growth, financial stability, or new investment, according to El-Erian. But something must be done, and quickly. As El-Erian notes, “There is no can to be kicked down the road.”

That may be true, but the scanty details available on the Greek deal lead to the conclusion that the Greek populace will surely take to the streets over pension and minimum wage cuts, to say nothing of another 15,000 or so projected job losses. If the deal on the table is the can that musn’t be kicked, it is also the can that is very likely to be rejected by Greek voters. Then what?