ATHENS: Pimco says that there’s a 30 percent chance Greece ends up dropping out of the euro area by accident.
Pacific Investment Management Co.’s central scenario is that Greece will muddle through and keep using Europe’s common currency. There’s a possibility of a debt payment being missed unintentionally and that would cause a blowout in bond spreads for the region’s other highly indebted nations, Mihir Worah told reporters in Sydney on Thursday. Pimco has reduced its bets on Italy and Spain to guard against that risk.
“We want to reduce our risk and have some dry powder to buy assets in Europe because we think a Greece exit will be volatile,” said Worah, Pimco’s chief investment officer for asset allocation and real return. “But at the end of the day it’s not going to impact the global economy, it could be a buying opportunity if you’ve got the wherewithal and you’re not in pain yourself.”
