Europe has three months to save the euro, billionaire investor George Soros said this weekend amid global pressure to end eurozone turmoil rocking financial markets and creating deep economic uncertainty.
“In my judgement, the authorities have a three months’ window during which they could correct their mistakes and reverse the current trends,” Soros said on Saturday at an economics festival in Trento, Italy, naming those authorities as Germany and the Bundesbank.
“In a crisis, the creditors are in the driver’s seat and nothing can be done without German support,” he said, adding that public opposition to austerity in the eurozone “is likely to grow until the policy is reversed.”
The remarks were posted on his Web site.
Greece is heading to the polls for a second time in six weeks after an inconclusive vote on May 6. With the radical leftist Syriza party — chief opponent of a massive EU-IMF bailout accord — tipped to win this time, the election could lead to Greece quitting the single currency.
“I expect that the Greek public will be sufficiently frightened by the prospect of expulsion from the European Union that it will give a narrow majority of seats to a coalition that is ready to abide by the current agreement,” Soros said, referring to June 17 polls in the debt-stricken state.
The “crisis is liable to come to a climax in the fall” of the year, he said.
“By that time the German economy will also be weakening so that [German] Chancellor [Angela] Merkel will find it even more difficult than today to persuade the German public to accept any additional European responsibilities,” Soros said.
“That is what creates a three months’ window,” he said.
Soros, a Hungarian-American investor and philanthropist, said austerity measures were having a disastrous effect on the global economy.
“The authorities didn’t understand the nature of the euro crisis; they thought it is a fiscal problem while it is more of a banking problem and a problem of competitiveness,” he added.
“And they applied the wrong remedy: You cannot reduce the debt burden by shrinking the economy, [but] only by growing your way out of it,” he said.