Europe Still Has a Mountain of Debt

As tempting as it may be to ignore conventional wisdom, Mohamed El-Erian says it's too soon for Europe to declare victory over the financial crisis.

Mohamed El-ErianThere was a time not so long ago when the vast majority of experts agreed that a country could not emerge decisively from a financial crisis unless it solved problems of both “stocks” and “flows”—that is, secured a flow of money to cover its immediate needs and found a way to manage its stock of outstanding debt over time.

In Europe today, this conventional wisdom appears to be fading. The temptation there is to declare victory having solved only the flow, not the stock, challenge.

About the Author

Mohamed El-Erian

Mohamed El-Erian

Mohamed El-Erian is the chief economic advisor at Allianz SE and the author of "When Markets Collide," a best-seller that won the 2008 Financial Times/Goldman Sachs Business Book of the Year. He is chairman of President Barack Obama's Global Development Council, a Financial Times contributing editor, and the former chief executive officer and co-chief investment officer of PIMCO. He holds a master's degree and doctorate in economics from Oxford University, having completed his undergraduate degree at Cambridge University.

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