Greece, Ireland and Portugal should dump the euro: investor

20th December 2010, Comments 0 comments

Greece, Ireland and Portugal should leave the eurozone to get their economies back on track, a senior executive of the world's biggest bond investor, Pimco, said Monday in an interview.

"Without their own currency or large fund transfers, Greece, Ireland and Portugal will not be able to land on their feet," Andrew Bosomworth, head of Pimco Europe's portfolio, told the German daily Die Welt.

Having their own currencies would allow a competitive exchange rate to boost exports and achieve the economic growth needed to be able to repay their heavy debt loads, he added.

Once growth returned and the countries regained the confidence of sovereign debt markets, they could reintegrate the single currency area, Bosomworth said.

Belgium, Italy and Spain should be able to overcome their own debt problems while remaining inside the eurozone meanwhile, with substantial help from partners, the bond investor added.

He also foresaw the introduction "at more or less long term" of a common eurozone bond, a development opposed by Germany and France because it would raise their borrowing costs.

The idea of countries leaving the eurozone has been floated regularly since a debt crisis erupted a year ago with news that Greece's finances were in much worse shape than previously acknowledged.

Many economists point however to the massive cost of such an operation and say that increased costs of borrowing to countries that left would probably dissuade them from taking such a step.

The eurozone is set to expand to 17 members on January 1 with the adhesion of Estonia.

© 2010 AFP

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