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Mohamed El-Erian, PIMCO CEO: Euro Leaders 'Making It Up As They Go Along'

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Policymakers in Europe may be making the economic crisis work instead of better, according to Mohamed El-Erian, CEO of PIMCO, the world's largest investment fund.

El-Erian told CNBC Thursday that while European leaders are "making progress in the sense that they recognize how bad the situation is," it may be too little, too late. The German parliament voted on Thursday to expand the powers of the Euro zone's 440 billion Euro bailout fund.

"I blame the policymakers for not realizing how severe the situation is," El-Erian said on CNBC. "They've been too slow to respond to these historic changes. They're making it up as they go along."

There's been no shortage of criticism for policymakers both in Europe and in the U.S. Paul Krugman, the Nobel-prize winning winning economist and New York Times columnist, has been especially outspoken, blamed economy's troubles on the "policy elite" back in May and more recently criticized Republican economic policies as "completely divorced from reality."

Billionaire George Soros wrote in The Financial Times on Friday that Europe needs to recapitalize banks, create a common treasury and protect vulnerable states like Italy and Spain to avoid a global recession, steps that policymakers are unlikely to take, according to Reuters.

Experts in the global economy experts are concerned as well. Kathy Lien, director of research at GFT Forex, a currency trading web site told Reuters earlier this month that consumers are losing confidence in policymakers, which could cool spending and slow any recovery.

"People are losing confidence in policymakers altogether," Lien told Reuters.

El-Erian has his own prescription for boosting confidence in policymakers and staving off global crisis. His "big to-do list" for policymakers includes, stabilizing the sovereign debt and bank situation, providing Greece with an 8 billion euro bailout and formulating a five-year plan, he told CNBC.

El-Erian said he recognizes that many American companies are sitting on piles of cash that if spent, would stimulate the economy, but he said it's not up to them to fix the current crisis.

"Policymakers are in control today and they are driving this car very erratically; they’re not even telling you what the destination is, especially in Europe," he said. "It feels really volatile, it feels unsettling."

WATCH Pimco CEO Mohamed El-Erian on CNBC here:

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