Mark Mobius: IMF giving Greece 'wrong medicine'
Franklin Templeton's emerging market veteran Mark Mobius has warned that the IMF's stance on bailouts for peripheral Europe is flawed.
Mr Mobius said the austerity measures imposed on Greece as part of its €110bn (£96.6bn) bailout package were reminiscent of its recommendations during the Asian crisis of the mid-1990s, which ultimately choked off growth in the region.
Speaking at the FundForum International event last month, Mr Mobius said: "The IMF is applying a medicine to Greece which hasn't worked in the past. If you want someone to pay back their debts you have to help them to grow.
"Reform is needed - Greece has suffered from ossified bureaucracy and corruption. The important things are the degree to which Greece is able to make these reforms, and how much other countries allow Greece to grow by lengthening its debt repayments."
In spite of the current sovereign debt problems overshadowing European markets, Mr Mobius said the continent would emerge strongly from the crisis with the aid of rapidly growing eastern European countries and strengthening links with Russia.
"Reform in Russia will have a great impact on Europe," the manager said. "The key is the degree to which companies can move into Russia and utilise its resources, both natural and human - the potential is incredible."
Mr Mobius holds significant overweight positions in Russia in both his $1.3bn Templeton Emerging Markets fund and $3bn Templeton Bric fund, according to their June 30 factsheets.