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Soros damns German handling of euro crisis

The Local · 26 Jan 2012, 15:54

Published: 26 Jan 2012 15:54 GMT+01:00

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Speaking at the World Economic Forum in Davos, Switzerland on Wednesday, Soros said that Chancellor Angela Merkel’s government was “dictating” European policy.

“The trouble is that the austerity that Germany wants to impose will push Europe into a deflationary spiral,” Soros said on Wednesday. “To be sure, I am not accusing Germany of acting in bad faith. Germans genuinely believe in the policies they are advocating.”

The investor said that beleaguered eurozone countries like Italy and Spain should have access to a lender of last resort composed of the European Central Bank (ECB), plus two rescue funds: the temporary European Financial Stability Facility (EFSF), and the future European Stability Mechanism (ESM).

Backed by these guarantors, Soros said countries would be able to refinance their economies cheaply.

Soros sharply criticized Germany strategy of imposing austerity measures on debt-ridden countries and for forcing financial penalties on Greece as a condition for receiving its bailout packages.

“The rest of Europe is not like the rest of Germany. The fact that an unattainable target is being imposed creates a very dangerous political dynamic,” he said. “Instead of bringing the member countries closer together it will drive them to mutual recriminations.”

Soros also said that Germany was traumatized by its experiences with massive inflation, which was leading the country to underestimate the threat of deflation. He said deflation can lead to a permanent decline in prices and a decline in consumer spending that can hurt a recovery.

Story continues below…

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The Local (news@thelocal.de)

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Your comments about this article

16:19 January 26, 2012 by gtappend
I am sure that many in Germany would be only too happy for other countries to foot the bill instead!
18:07 January 26, 2012 by Craptastic
Of course he does, doesn't he own a large portion of an electricity utility in France? If the prices dropped and people were watching money, he'd get hurt. Or, and I'm just spit-balling here, maybe he would like to bankrupt France the way he nearly did to Britain by capitalising on a currency crisis.
18:36 January 26, 2012 by murka
Well, Germany's trade surplus is widening even more in 2012. German bonds fell under 2%. In other words, the earnings are not being spent. Not exactly a neighbour you want to have a common currency with.
19:23 January 26, 2012 by raandy
He sees this as a global problem. the euro zone is pulling the western world down. If they fail they take North america and parts of South America and Asia with them.

It will result in the reconstruction of a lot of economies , in the end this could be better as the results of austerity succeed. You can not keep borrowing when you can not repay.
19:46 January 26, 2012 by Enough
Soros...the two faced liberal billiionare....why anybody listens to him is a mystery....when he doesn t practice what he preaches.
01:59 January 27, 2012 by DavidtheNorseman
I suspect that Mr. Soros largest concern is .... Mr. Soros.
07:10 January 27, 2012 by Siriuslyblue
If said Soros was truly concerned with helping the countries and people of the world, let him offer up all his wealth and resources to re-establish stability to the financial marketplace. Same on this sad soulless man.
10:42 January 27, 2012 by pepsionice
Just to point this out to those who don't follow the career and strategy of Soros....he gets rich off government's mistakes (and almost nothing else). He's typically betting against your currency or your solutions, and when he bets....he's more than confident in winning.
11:14 January 27, 2012 by datt
¦quot;This is a battle of currencies¬. The Euro versus the US dollar.

It is also about who is in charge. The bankers or the elected politician¬s

The US dollar is toast because of stunning moronic mismanagem¬ent over several years.

The US, England and others are determined to suck the financial blood out of Germany thereby destroying the Euro.

The Euro is a real threat to the US dollars dominance hence the white-anti¬ng.

They should stop haranguing Germany and concentrat¬e in putting their own house in order by bringing their parasitic financial sector to heel.¦quot;
11:46 January 27, 2012 by coffejohn
This is all rather unfair on Germany, all they are saying is that the profligate Europeans should get their fiscal houses in order.

This is not even selfish as many suggest, after all it would mean fat cats in the rest of Europe no longer buying Mercs.

The simple truth is that too many countries have overspent and now need to pay off their loans and start to live within their means.

The problem is how to get them to do so and how to manage the process while keeping their economies stable.
12:14 January 27, 2012 by HelloOutThere
Almost every Western nation is highly in debt, because they did not follow the more than simple rule that you basically should not spend more money than you actually have. But that's not only a problem concerning states - it's also a problem concerning the people living in these states (especially the people living in the United States). Of course taking a credit from a bank and thus making debts can be necessary when you have an idea, but (currently) don't have the money to translate this idea into real life - by doing so you can even make more money and eventually the state (via taxes you need to pay) and other people (via getting a job) can benefit from you having taken a credit. But unfortunately the people want to have a higher standard of living they actually can afford to have, so they even take a credit for buying a highly sophisticated TV or for buying an expensive Mercedes instead of a less expensive Volkswagen.
13:00 January 27, 2012 by zeddriver

If he was just making bets on currency and government mistakes that would be fine. But. He is one of those people that is rich enough to influence currencies. Which he does through giving tons of money to orgs. that funnel said money to folks such as Occupy Wall Street. Why would a capitalist at heart donate so much money to all these left leaning anti capitalist folks? Because he makes money from the market/currency instability that these folks create. And donating to such folks. He has just enough distance to say he did not directly create the instability. He says he just wants equality for all.
13:23 January 27, 2012 by ChrisRea
Funny - after he delivered this anti-German speech, the same day Italy got the best borrowing cost since August 2010 and the European shares jumped at a 6-month high. At the time I am writing, DAX is rising even more. Apparently the world understands that Soros' speeches are not meant to reveal the truth, but only to manipulate opinions so he can make a profit.
13:35 January 27, 2012 by raandy
datt, I doubt this is a battle between the two currencies, The US is very happy when the Euro is trading at 1.40, doubt that is true for Euro Zone exporters.
17:15 January 27, 2012 by jabulani
What Soros said it is not rocket science. Eurozone was created to have more control over people, taxation etc, it is the ECONOMIC ESLAVERY of the european population who lost the right of FREEDOM of speach.

Their politicians are no longer the "servants of the people" they have their own agenda for their CLAN'S benefit and ride on the sacrifice and hardwork of their citizens
19:39 January 27, 2012 by Ricardoh
People are like children the more you give them the more they want. I think we can say the party is over, and if it isn't it soon will be.
22:43 January 27, 2012 by Betty L
lets see if Soros can take all those millions with him when he dies. I wander if he has it fixed so when he goes they will build a tomb for him and collect all his money and dump it in on top of him that would be a gaser wouldn't it hahahahaha
01:54 January 28, 2012 by Tanskalainen
Why was my comment removed?
12:46 January 28, 2012 by christopheuk25
People can pontificate all they want about the finances of Europe and how it can be solved,but given the pathetic calibre of European politicians theyr'e wasting their time.

All you need to understand is that the Euro is finished, when? very soon,the whole EU ponzi scheme coupled with insane Left wing Liberal shangri-la ideology that propped it up was doomed from it's conception.;

You can in the future!!,if possible tell your Grandchildren that you witnessed the final death throes of an ill managed abortion.

Prepare for the bloo@y worst.your self serving politicians have raped your countries and yourselves for their own interests.You are nothing more than fools that deserve all that you are going to suffer shortly,for you voted these imbeciles into power on the promises of a rich and easy life.Well just take a look round Europe now all that can be seen is violence,civil unrest,terrorism a detested multiculturism,oppressive laws and a loss of soverignty and freedom oh and poverty on a scale that is fast becoming the norm.
12:53 January 28, 2012 by cassandra777
Soros's Better Angels are "dictating" that he keep his mouth shut. I am sure he won't listen...or OBEY...
17:35 January 28, 2012 by Matt in Florida
Soros is the archtype for the international banker who is a leach on everyone. Increases in his wealth, power and control of the masses by creating fake money, and debt slaves out of as many as his filth can.
09:49 January 29, 2012 by luckylongshot
While Soros is to be commended for speaking the truth when he said that capitalism was inherently self destructive his latest comments about Germany are hypocritical. He acknowledged that the current system will fail, yet is now advocating Germany make itself more vulnerable to this very system.
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