FRANKFURT Spain and Italy are regaining the trust of PIMCO, home to the world's largest bond fund, which is boosting its holdings of government debt in the crisis-shaken countries, the head of PIMCO's German unit said on Thursday.
"We have cautiously begun rebuilding our engagement in Spain and Italy but we are not completely there yet," Andrew Bosomworth told the Euro Finance Week conference.
PIMCO expects the southern European countries to carry on with structural reforms and that Europe will finally takes a political decision on what the euro and the European monetary union should look like, he said.
Bosomworth also urged the euro zone's core countries, Germany and France, not to slacken their pace of economic reforms, saying it was the only way for Europe to get back on its feet.
PIMCO is a unit of Allianz (ALVG.DE), Europe's biggest insurer and one of the largest investors in the world. PIMCO had about 1.5 trillion euros ($1.9 trillion) in total assets under management at the end of the third quarter.
Bosomworth had said in June that the increased liabilities Germany faces as a result of the euro zone crisis were eroding the attractiveness of its sovereign bonds, the bloc's benchmark government paper.
PIMCO said earlier on Thursday it had resumed buying Italian debt with a maturity of up to five years.
(Reporting by Jonathan Gould; Editing by David Holmes)