MercoPress, en Español

Montevideo, November 13th 2018 - 16:02 UTC

Soros tells Germany preparing for “end of the Euro” only worsens the situation

Thursday, April 12th 2012 - 17:11 UTC
Full article 4 comments
The US/UK/Hungarian born billionaire has made accurate forecasts  The US/UK/Hungarian born billionaire has made accurate forecasts

Billionaire investor George Soros said financial markets are concerned other countries will follow Germany’s Bundesbank in girding against the end of the Euro.

The Bundesbank is campaigning against the “indefinite expansion” of money supply and taking steps to limit the losses it would face if the Euro splintered, Soros said in a speech in Berlin.

“This is creating a self-fulfilling prophecy,” he said. “Once the Bundesbank starts guarding against a break-up everybody will have to do the same. Markets are beginning to reflect this.”

As the debt crisis stretches into a third year, Bundesbank President Jens Weidmann has begun warning that the European Central Bank’s emergency liquidity measures “create risks and have to be unwound” after the ECB balance sheet ballooned by about 30% since November.

If the ECB continued offering support for a few more years then a “break-up of the Euro would become possible without a meltdown,” Soros said.

“The omelette could be unscrambled, but it would leave the central banks of the creditor countries with large claims against the central banks of the debtor countries which would be difficult to collect,” he said.

Soros also said Europe’s so-called fiscal compact “cannot possibly work” because highly indebted nations will either choose not to meet its tougher fiscal rules or by doing so trigger collapsing demand.

“Either way, debt ratios will rise and the competitiveness gap with Germany will widen,” he said. “Whether or not the Euro endures, Europe is facing a long period of economic stagnation or worse.”

The resulting “deflationary debt trap” will threaten the existence of the European Union, he said.
 

Categories: Economy, Politics, International.

Top Comments

Disclaimer & comment rules
  • briton

    the euro will come back again, under different rules, and with different countries, starting whith ??

    Apr 12th, 2012 - 08:25 pm 0
  • Stefan

    Whatever you do, RULE#1 Never listen to anything Soros says. He's as corrupt as Venezuela. Secret far left agendas stem from Soros.

    Apr 12th, 2012 - 10:44 pm 0
  • lsolde

    @2 Stefan,
    Malaysia still holds Soros responsible for the 1999 Asian meltdown.

    Apr 13th, 2012 - 08:53 am 0
Read all comments

Commenting for this story is now closed.
If you have a Facebook account, become a fan and comment on our Facebook Page!