There's a "high probability" of a Greece exit from the euro zone, Mohamed El-Erian said Monday, a day after Greek voters rejected the bailout terms of creditors in a national referendum.
The economy there is grinding to a halt, said El-Erian, chief economic adviser at Germany's financial services giant Allianz. "What's happening on the ground means the situation is slipping out of the control of the politicians. I don't think that's being factored in enough."
In a surprise move, Yanis Varoufakis, the fiery Greek finance minister, resigned on Monday, in what's seen as a concession to lenders despite his anti-austerity victory.
Varoufakis said he wanted to give Prime Minister Alexis Tsipras a "fresh start" in reforms talks, which could decide whether Greece stays in the single euro currency.
"The euro zone controls its own destiny. The euro zone has instruments to limit contagion. They haven't been deployed yet," said El-Erian, former co-CEO of Pimco.