Pimco’s Bill Gross Says Greece to Default Following Downgrades
January 19, 2012, 11:05 PM ESTBy Wes Goodman
(For more on Europe’s debt crisis, see EXT4 <GO>)
Jan. 16 (Bloomberg) -- Bill Gross, who runs the world’s biggest bond fund at Pacific Investment Management Co., said Greece is heading for default.
Standard & Poor’s downgrade of European ratings makes investors aware “countries can default,” Gross said in a Twitter posting. Greece will prove to be the most recent example, Gross wrote.
Greek officials will reconvene with creditors on Jan. 18 after discussions stalled last week over the size of investor losses in a proposed debt swap, raising the threat of default. German Chancellor Angela Merkel and French President Nicolas Sarkozy will also meet as the European Central Bank warns governments against “watering down” a revamp of budget laws.
France and Austria lost their top credit ratings in a string of downgrades Jan. 13 that left Germany with the euro area’s only stable AAA grade, as S&P warned that crisis-fighting efforts are still falling short. European leaders are struggling to tame a crisis now in its third year and convince investors they can restore budget order.
--Editors: Garfield Reynolds, Naoto Hosoda
To contact the reporter on this story: Wes Goodman in Singapore at wgoodman@bloomberg.net
To contact the editor responsible for this story: Garfield Reynolds at greynolds1@bloomberg.net
