By Alan Hall
August 16, 2011
Speculator George Soros says both Greece and Portugal should dump the euro and quit the EU because of their massive debts.
Soros told Germany’s Der Spiegel magazine that leaving would not kill off the euro – or the EU.
Debt-stricken Greece and Portugal are struggling to implement eurozone and International Monetary Fund-mandated reforms by slashing spending and raising taxes in exchange for financial aid.
European shares experienced slight gains as investors focused on tomorrow’s meeting between France and Germany to deal with the current financial crisis in the region.
President Nicholas Sarkozy and Chancellor Angela Merkel have taken leading roles in the debt crisis and will hold talks and a press conference in Paris.
Soros also suggested the time had come for eurozone members to accept the introduction of eurobonds.
‘Whether you like it or not, the euro exists. And for it to function properly, countries sharing the currency must be able to refinance a large part of their debt under the same conditions,’ he said.
Berlin is opposed to the introduction of such bonds, but Soros suggested Germany, as Europe’s strongest financial partner, should be responsible for defining the rules for its introduction.
Soros, who made over $1billion by betting against the British pound in 1992, also said he had no intention of playing the market against the common european currency.
‘I am certainly not betting against the euro, because the Chinese have a huge interest in an alternative to the dollar and will do everything possible to help Europeans save it,’ he said.
Both Greece and Portugal, along with Ireland, have been granted multi-billion EU-IMF rescue loans to prevent them from defaulting on their huge debts.
Despite Berlin’s resistance to the idea of eurobonds, today one of Germany’s leading economic associations came out in favour of the move, claiming all other avenues had been exhausted.
BGA export association president Anton Boerner said: ‘What is the alternative?
‘The alternative is the markets attack Italy, then France, we lose our AAA rating and then it’s our turn. This is a downward spiral that would lead to a worldwide depression.
‘What have we achieved then? We’ll end up paying [for the crisis] three times over. This way we pay just once.’
The head of the centre-left Social Democrats, Sigmar Gabriel, has also backed the idea, telling German public television station ARD late on Sunday that eurozone countries should be able to raise 50-60 per cent of their funding through such joint issues if they agreed to certain conditions. ..