Billionaire businessman and prominent philanthropist, George Soros reportedly told Bloomberg that it is probable a country will exit the euro, as strategies are being implemented to allow economically weaker nations to abandon the European Union.
Many economists are speculating whether the Eurozone may eventually split and if the currency can survive the present turmoil, resulting from political leaders’ unwillingness to take the necessary steps to address underlying factors.
Soros, who previously generated over 30% while running the Quantum fund and proved his expertise in currency speculation when he made $1 billion by betting against the British pound in 1992, said that the survival of the EU is of “vital interest to all,” but is in desperate need of restructuring before it disintegrates entirely.
Sunday, he ardently advised policymakers to develop a “plan B” that would prevent the EU from slipping further into complete collapse.
Because there is no contingency strategy in place, “authorities are sticking to the status quo and insisting on preserving the existing arrangements instead of recognizing there are fundamental flaws that need to be corrected.”
The investment guru explained that given it was not backed by a political union or joint treasury, the euro was flawed from the start.”
“The euro had no provision for correction… no arrangement for any country leaving the euro, which in the current circumstances is probably inevitable.”
Soros did not specify one country in particular; however, given the ongoing fragility of the European debt crisis, most recently in Greece, his prediction of a country eventually needing to leave the euro is not far-fetched.
Efforts to drive the EU in a more positive direction might include creating a larger central budget, directing some income from value-added tax or a levy of financial transactions to Brussels, having some European institution guarantee banks or tripling the size of the current bailout fund with tax revenues.
By. David Moenning of Top Stock Portfolios