Pimco's El-Erian: Greece Exit From Euro 'Probably Inevitable' -Bloomberg

Mohamed A. El-Erian, chief executive and co-chief investment officer of Pacific Investment Management Co., said in an interview with Bloomberg Radio that a Greek exit from the euro "is probably inevitable and therefore we should plan for it."

European Union economies are facing increased volatility, reflecting a "policy risk premium" and a "complexity risk premium," El-Erian said, according to an account of the interview on the Bloomberg News website.

El-Erian said Germany, France, Italy and Spain should help form a smaller, "less imperfect" currency union and said Greece needs to "focus on which step allows them medium-term viability."

Meanwhile, El-Erian said yields on 10-year Treasurys could fall by 10 basis points or rise by 30 basis points, Bloomberg reported.

Full story at http://www.bloomberg.com/news/2012-05-21/el-erian-says-greek-euro-exit-probably-inevitable-tom-keene-1-.html

-Dow Jones Newswires; 212-416-2900