The head of Pacific Investment Management Co. (PIMCO), the world’s biggest bond fund, predicted that Greece and other European nations would default on their debts to resolve their problems as the euro area deals with its debt crisis, Reuters reported.

Greece’s government won a vote of confidence late on Tuesday, a crucial step toward securing further short-term and longer-term financial aid from the European Union and the International Monetary Fund as the country tries to avoid the euro zone’s first sovereign debt default.

“For the next three years, we’re going to see different economies work out different problems. For European economies, especially Greece, it would be through default,” Mohamed El-Erian, CEO of PIMCO, told reporters in Taipei today via a video conference. He didn’t identify which economies other than Greece he was referring to.

El-Erian has suggested in the past that Greece would default and that Europe risks wasting money for nothing by pumping billions of dollars into the ailing economy.
“Nothing has been done to enhance growth,” he said. “No single (Greek) indicator has shown strength. They are afraid a restructuring would hurt European banks.”

He doubted a Greek default could trigger another global financial crisis.

“Ireland, Portugal, Italy and Spain would have to be involved. But Greece is too small in terms of economic impact,” El-Erian said.