Germany and rest of world in disagreement, says Soros
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Billionaire investor George Soros has claimed there is a disagreement between Germany and the rest of the world in tackling the current debt crisis.
George Soros / Source: IB Times
Speaking to Bloomberg TV at the World Economic Forum in Davos, Soros says austerity and structural reforms proposed by Wolfgang Schauble, the German finance minister, were not the only solution.
Soros says there needs to be a two-phase approach, arguing that what has previously worked for Gemany in the past may not work for Europe in the present.
He says: “What applied to Germany in the 1990s doesn’t work for Europe in 2012. So there has to be a second phase.
“And I think it’s important that they should start thinking about it because without it, the situation is hopeless. And without hope, people don’t act the right way. (article continues below)
“It’s not that difficult to recognise that once you’ve got austerity and these labor reforms that you need and so on, you then still need a stimulus and you must find some way of stimulating the economy because there is a deficiency of demand In the world.”
Soros also claims that a Greek default would not be the “end of the road” for the indebted country, but Europe would need to be ringfenced
He adds: “Right now if Greece were to default at the end of March or April, that would be a very severe test for the global financial markets because not enough has been done to isolate the rest of the eurozone from Greece.”
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