CHICAGO (Reuters) – Michael Hasenstab, who runs the $57 billion Templeton Global Bond Fund , said on Wednesday that the European debt crisis is a “blessing in disguise” and criticized the dollar as a safe haven.
Speaking at the 2012 Morningstar Investment Conference in Chicago, Hasenstab said the European debt crisis has revealed that Europe suffers from not having a fiscal union and from a “lack of competitiveness and convergence” between its countries.
Hasenstab added that overcoming the euro zone crisis is “going to be messy, but it’s not Armageddon.” Italy needs to focus on structural reforms since a credit event in the country is a key danger.
In an interview, Hasenstab said the “big fear” is still Greece.
“I think the big fear is just the financial contagion from Greece and everything about banking and about debt markets is confidence,” he said. “So I think that is the fear – that even though, fundamentally, Italy is solvent, Spain is solvent, you have enough bad confidence, you can turn a solvent situation insolvent.”
He said policymakers “need to err on the side of doing too much” to establish a fiscal union.
The recent recapitalization of Spain’s banks was one “tangible” action toward resolving that country’s debt problem, Hasenstab told Reuters and added that it “should’ve been