© 2024 Blaze Media LLC. All rights reserved.
"There is a disagreement on the fiscal side. Unless that is resolved in the next three days, then I am afraid the summit could turn out to be a fiasco."
Billionaire philanthropist and currency speculator George Soros said on Monday that unless European leaders quickly devise a bold plan to stave off the euro crisis, the EU summit will be a total “fiasco.” So he offers his advice: create a fund to “purchase the bonds of Italy and Spain in return for budget cuts in the nations,” as Bussinessweek reports.
Investors don’t think EU leaders are willing to make the tough calls necessary to save the currency, Soros said in a Bloomberg TV interview.
“There is a disagreement on the fiscal side,” he said, referring to German Chancellor Angela Merkel's refusal to side with the more-spending-will-solve-everything camp. “Unless that is resolved in the next three days, then I am afraid the summit could turn out to be a fiasco.”
But how, exactly, would this fund work? Business Insider’s Joe Wiesenthal explains the Soros plan:
A new "debt redemption fund" would be launched, which would have the ability to buy up sovereign debt funding itself via ECB backed Treasuries with the safest risk weighting. In exchange for countries being able to fund itself via that fund, they would have to agree to various structural reforms. Any failure to deliver on reforms would get a penalty, but not a fatal one. Eventually after all the reforms were made, a more complete fiscal union/Eurobonds scheme could be enacted.
And just in case people don’t take him seriously on the whole “fiasco” thing, Soros also warns that Germany's refusal to allow the European Central Bank to buy up more sovereign debt could be “fatal.”
"It will leave the rest of the eurozone without a strong enough firewall to protect it against the possibility of a Greek exit," Soros writes.
“Even if a fatal accident can be avoided, the division between creditor and debtor countries will be reinforced and the 'periphery' countries will have no chance to regain competitiveness because the playing field is tilted against them,” he adds.
Want to leave a tip?
We answer to you. Help keep our content free of advertisers and big tech censorship by leaving a tip today.
Want to join the conversation?
Already a subscriber?
more stories
Sign up for the Blaze newsletter
By signing up, you agree to our Privacy Policy and Terms of Use, and agree to receive content that may sometimes include advertisements. You may opt out at any time.
© 2024 Blaze Media LLC. All rights reserved.
Get the stories that matter most delivered directly to your inbox.
By signing up, you agree to our Privacy Policy and Terms of Use, and agree to receive content that may sometimes include advertisements. You may opt out at any time.