El-Erian: Europe Finally ‘Gets’ Severity of Debt Crisis

Policymakers in Europe “finally” understand the severity of the region’s sovereign-debt crisis and the actions that need to be taken, Pacific Investment Management Co.’s Mohamed El-Erian told Bloomberg Radio on Tuesday.

“What I learned in Washington is that Europeans finally get it,” El-Erian. “They recognize they have deep problems, and they recognize they need to do something about it. And now they are going back and will try to do something about it. This was a very important wake-up call for Europe.”

As the news service notes, finance chiefs from the Group of 20 agreed to increase the flexibility of their rescue fund and “maximize its impact.” European Central Bank policy makers have indicated they’ll consider expanding liquidity provisions when they meet on Oct. 6.