PIMCO boss: EU must cut Greek debt by a third

Europe should relieve Greece of a third of its debt burden as the country's programme of cuts will only stifle economic growth, says Mohamed El-Erian.

Pacific Investment Management Company's (PIMCO) chief executive says the crippled nation's only hope is for Europe to cut Greek debt from 140% of GDP to 90%. "Debts should fall under 90% of GDP," El-Erian, who helps oversee more than $1.1trn in investments, told the German Der Spiegel magazine on Saturday. "The people cannot withstand (the current government savings programme)," he says. International investors would only return to Greece once the economy was growing sustainably again, he warns. Athens could afford "to take a time out from the euro" to achieve this, before joini...