Friday, January 06, 2012
Who needs billionaires?
Reuters has George Soros (above) telling us all that the collapse of the euro and break-up of the European Union "would have catastrophic consequences for the global financial system".
His quote was actually in the Business Line newspaper, delivered while he was in the south Indian city of Hyderabad. "Today", he says, "the euro is potentially endangering the political cohesion of the European Union".
He adds: "If the common currency were to break down, it will lead to the break up of the European Union itself. And this will be catastrophic not only for Europe but also for the global financial system".
Soros thinks that the euro crsis is "more serious and more threatening than the crash of 2008". In his view, some euro countries may have to take more austerity measures because of the imbalances between the "creditor and the debtor countries".
"Unfortunately, they haven't yet solved the acute financial crisis and that is causing the situation to deteriorate...and (it) is not at all clear it will have a solution," he concludes.
Thus do we see once again the evidence that being a billionaire doesn't necessarily make you right. He may have got lucky on the ERM, but austerity measures are not the answer. The break-up of the single currency is. And it most certainly will cause problems … but not breaking up will be even worse.