George Soros continued his long-standing anti-austerity crusade on Tuesday, telling members of the euro zone’s largest economy that its policies have failed and that it should consider exiting the 27-member union.
“The financial problem is that Germany is imposing the wrong policies on the euro zone. Austerity doesn’t work. You can’t shrink the debt burden by shrinking the budget deficit,” Soros said during a speech in Frankfurt on Tuesday.
Soros also accused Germany of fouling up the Cypriot €10 billion ($13.07 billion) bailout by supposedly insisting the country’s depositors forfeit a percentage of their savings.
“In the bailout of Cyprus, Germany went too far, what happened in Cyprus undermined the business model of the European banks which relies heavily on deposits,” he said.
The legendary investor’s remarks were made during a lecture entitled “How to save the European Union from the euro crisis.” In his speech, Soros said “a large share of the responsibility [for the crisis]” belongs to Germany.
“I want to make it clear in advance that I am not blaming Germany. Whoever was in charge would have made similar mistakes…I realize that I risk antagonizing you by putting the responsibility on Germany. But only Germany can put things right,” he added.
Soros suggested an ultimatum for Germany: Either drop your opposition to the mutualization of the EU’s debt (i.e. agree to the establishment of so-called “eurobonds”), or get out.
“My first preference is eurobonds; my second is Germany leaving the euro…It is up to Germany to decide whether it is willing to authorize eurobonds or not. But it has no right to prevent the heavily indebted countries from escaping their misery by banding together and issuing Eurobonds,” he said.
“In other words, if Germany is opposed to eurobonds it should consider leaving the euro and letting others introduce them,” he added
He went on to accuse Germany of refusing to take responsibility for its policies.
“Germany did not seek the dominant position into which it has been thrust and it is unwilling to accept the obligations and liabilities that go with it. Germany understandably doesn’t want to be the ‘deep pocket’ for the euro. So it extends just enough support to avoid default but nothing more,” he added.
If you’re surprised by Soros’ most recent comments, you shouldn’t be. Indeed, as noted elsewhere on TheBlaze, “the man who broke the Bank of England” has been pounding away at the anti-austerity, anti-Germany drum for months.
This latest iteration of an old theme is merely an escalation in the one-sided war of words between the billionaire philanthropist and Europe’s most profitable country.
But why is he so insistent that the EU drop austerity and accept debt mutualization?
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(H/T: CNBC). Featured image Getty Images.