El-Erian: Grexit would not be a major catastrophe

Mohamed El-Erian, chief economic adviser at Germany-based Allianz, told CNBC on Tuesday that a Greek exit from the euro would cause "short-term chaos," but it would not bring the global economy to its knees.

The former Pimco co-CEO said in a " Squawk Box " interview he expects short-term losses and a lot of volatility. "The reason it would not be a major catastrophe is because Europe has done a lot to navigate a Grexit [Greek exit]."

Debt talks between Greece and its euro zone creditors broke down late Monday, raising concern ahead of the expiration of Greece's current bailout loan later this month.

Read More Greece: The final countdown

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