Franklin Templeton's Mark Mobius says letting Greece default on its debt would be the best way to ease the European fiscal crisis and calm contagion concerns.
Mobius, known as the ‘godfather of emerging markets', says Greece should consider restructuring its debt to pay 25 to 50 cents for every dollar owed, cutting its borrowing to a more sustainable level.
Lending aid to Greece may drag down the European Union as other indebted nations seek a bailout in turn, he says.
"A default will help to plug the leak," Mobius says in an interview with Bloomberg Television. "A bailout at this stage does not make sense to me.
"The Greeks are rich. If you look at what happened during the Olympics, they raised $10bn (£6.6bn) and there are only 10 million people. The problem is they don't want to pay taxes because the Government is not serving them well."
Fears of the debt crisis widening across Europe has sparked a sell-off in stocks worldwide and sent the euro toward a one-year low against the dollar. The MSCI AC World Index has dropped 2.8% since Standard & Poor's cut Greece's credit rating to junk and downgraded Portugal and Spain.
Greece needs to repay €8.5bn (£7.4bn) of maturing bonds on 19 May, while the country's Finance Minister George Papaconstantinou says the country can no longer afford to borrow.
Eurozone leaders have called an emergency summit on 10 May in a bid to approve a rescue package.
"I don't have any problem with this so-called contagion," Mobius adds. "It is a short-term phenomenon and people are getting panicked. This is driven by market makers, people who are shorting the debt in these countries."
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