April 12, 2010 / 3:28 PM / 10 years ago

Pimco's El-Erian: Greece aid tackles liquidity, not solvency

NEW YORK, April 12 (Reuters) - Euro zone member states’ commitment to provide up to $40 billion in loans to Greece addresses liquidity support rather than solvency issues for the indebted country, the chief executive of Pimco told Reuters.

Mohamed El-Erian, chief executive and co-chief investment officer of Pacific Investment Management Co., said on Monday that Sunday’s agreement of a euro zone loan package tackles a liquidity crisis, not a fundamental crisis.

“Yet markets have signaled that Greece faces both refinancing, or liquidity challenges, as well as stock of debt, or solvency challenges,” El-Erian said. (Reporting by Jennifer Ablan; Editing by Chizu Nomiyama)

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