El-Erian: "Europe Is One or Two Rounds of Sanctions From Recession"; El-Erian Far Too Optimistic

In a speech on BRICs at the Peterson International Institute of Economics former PIMCO co-head El-Erian made the claim Europe Is One or Two Rounds of Sanctions From Recession.

The West, and Europe in particular, is one or two rounds of sanctions and counter-sanctions away from entering into a new recession, chairman of President Barack Obama’s Global Development Council Mohamed El-Erian stated Monday.

“We are one or two rounds of sanctions and counter-sanctions away from the European politics over the Ukraine tipping Europe into a recession,” El-Erian said in a speech on the BRICS economies at the Peterson International Institute of Economics.

He noted that the impact of level three sectoral sanctions against Russia is “taking the West into a recession through sanctions to the energy sector.”

Arguing against the notion that Western economies are managing to keep pace after the crisis and despite the sanctions against Russia, El-Erian stated, “It may be chugging along in the United States, but Europe is looking at flat growth.”

According to Obama’s global development adviser, Ukraine continues to be a problem. El-Erian concluded, “The current state of play in Ukraine is lose, lose, lose” for Ukraine, Russia, and the West.