Billionaire financier George Soros said on Monday that the eurozone was edging closer to solving its debt crisis – but reiterated his call for Germany to either lead the bloc or leave it.
Speaking in Berlin at an event organised by the Institute for Media and Communications Policy, Soros said: “I am happy to note that the political debate in Germany has shifted in favour of saving the euro.”
He pointed to a June EU summit where leaders agreed to allow the eurozone bailout fund to help stricken banks and the European Central Bank’s decision last week to buy the bonds of debt-wracked countries.
“Both were made possible by the support of Chancellor Angela Merkel,” noted Soros.
He called for two more steps to be taken to save the eurozone from what he termed a looming “nightmare”.
He said policymakers should stop insisting on austerity for countries in crisis and that nations should pool their debt – a solution opposed in Berlin until there is a genuine fiscal union in the bloc.
“That would save Europe from depression. We are tantalisingly close to a lasting solution,” said Soros, according to the text of his speech.
“It is up to Germany now to decide which alternative it chooses,” he said.
“If the German public were willing to accept the additional liabilities that the remaining two steps would entail it would be by far the best for all concerned if Germany stayed in the euro.
“If not, it would be best if Germany and other like-minded creditor countries withdrew from the euro in a negotiated separation,” suggested the 82-year-old.
In an essay appearing in several publications over the weekend, Soros suggested that Germany should either accept its role as de-facto leader of the eurozone or leave the bloc altogether.
If Germany left the euro, the value of the currency shared by the rest of the bloc would depreciate sharply, argued Soros, making their exports more attractive and slowly becoming more competitive.
“Europe would escape from the looming depression,” he said.
Soros also noted that Wednesday’s decision by Germany’s top court on the legality of the ESM bailout fund and the EU’s fiscal pact for greater budget discipline might prevent the German leadership role he recommends.
“In that case, Germany would have to hold a referendum to decide whether to lead or leave,” he said.