Billionaire investor and philanthropist George Soros has said Germany needs to abandon its demands for austerity in other eurozone countries and embrace the continued fiscal unification of the region or leave the eurozone itself.
He said Germany could lead the eurozone by boosting growth to around 5 percent, creating a joint fiscal authority to manage the European Financial Stability Mechanism and the European Financial Stability Facility, and guaranteeing common bonds. Otherwise, Germany should leave the currency union to save the future of Europe.
In an interview with the Financial times, Soros, Chairman of Soros Fund Management said, Germany must either lead the Eurozone out of recession or leave the currency union in order to save the future of Europe.
“Lead or leave: this is a legitimate decision for Germany to make,” the billionaire financier and philanthropist said. “Either throw in your fate with the rest of Europe, take the risk of sinking or swimming together, or leave the euro, because if you have left, the problems of the eurozone would get better.”
He added that the European recession will intensify and spread to Germany, the eurozone’s largest economy, within six months if Germany keeps insisting that its European partner governments undertake strict austerity measures.
“The policy of fiscal retrenchment in the midst of rising unemployment is pro-cyclical and pushing Europe into a deeper and longer depression,” Soros said on Monday in prepared remarks ahead of a speech in Berlin.
“That is no longer a forecast; it is an observation. The German public doesn’t yet feel it and doesn’t quite believe it. But it is all too real in the periphery and it will reach Germany in the next six months or so.”
Soros also said that Germans are debating whether to work toward preserving the euro or to leave the euro zone completely.