During an interview with the French newspaper Le Monde, billionaire currency speculator George Soros said that were he not a retired investor, he’d “bet against the euro.”
“You have long speculated on currencies…would you be willing to bet against the euro?” Le Monde asked Soros.
“I am now retired, and my Quantum fund has no position in euro. But until there is no change among European leaders, if I were to invest, I would bet against the euro. Or at least, I’d bet on it,” Soros responded.
However, it should be noted that it’s not until the end of the Le Monde interview that Soros makes his comments about the euro. Most of the article consists of him railing against the Bundesbank (Germany’s federal bank) and calling for European authorities to take complete control of the EU’s finances.
“I fear that the political leaders of today will lead to a disaster. The euro threatens to destroy the European Union and, with the best of intentions, the leaders are leading Europe to its ruin by trying to impose inappropriate rules,” Soros said.
“The most fragile countries in the euro area have discovered they are in a situation of third world countries, as if they were indebted in foreign currency,” he added.
“Even if the euro survives, Europe has before it a period of great difficulties.”
As most Blaze readers know, when Soros starts talking like this, it’s best to listen. After all, as noted by Ambrose Evans-Pritchard for The Telegraph, he “has some expertise in this field.”
“His cue for launching a speculative attack — with others — on Sterling and the Lira in September 1992 came after Bundesbank Chief Helmut Schlesinger told Handelsblatt that the two currencies were overvalued within the [Exchange Rate Mechanism] peg,” Evans-Pritchard adds.
Soros continued (via Le Monde):
The crisis can be stopped at any time. But this requires that the authorities realize that extraordinary situation requires extraordinary responses, “outside the box.” But the rules need to be changed to be sure the system does not emerge from its box.
A radical proposal would create a holding company through the ECB [European Central Bank], where states would transfer 2,000 to 3,000 billion euros of bonds and would not have to pay interest.
The problem is in Germany, because the public has confidence in the Bundesbank…The Bundesbank dominates European politics, but it has taken action good for Germany, not for Europe. Because Germany is a flourishing country, it benefits from the euro crisis, the low exchange rate of the euro relative to the strength of its economy and low interest rates to finance its debt.
The situation remains very serious, as related to the sovereign debt crisis. Bank recapitalization should continue, and that the European Stability Mechanism may be useful.
It is especially important to introduce a real European control over banks, because there are too many incestuous relationships between banks and national governments. Particularly in France, with the “financial inspectors”
As some Blaze readers may have noticed, this is basically a continuation of last week’s Financial Times op-ed where Soros said “the euro crisis has recently taken a turn for the worse” and that the the German banks can’t solve the EU’s problems.
This article has been updated.