The veteran international investor, George Soros, has come out and said that Germany should either take the lead in saving the Euro or just leave.
This comes at an important moment for both Germany and the Eurozone as the German constitutional court is due to rule on whether the German government’s support for the new ESM bailout fund is legal or not.
Mr Soros said in a Reuters TV interview in Vienna that the current situation where Germany is forcing the pace of austerity on other Eurozone countries would only result in a risk of ‘sinking or swimming together’ with the rest of the EZ.
Much better, he says, for Germany to take the lead and boost growth and create a joint fiscal authority as well as guaranteeing some form of EZ common bonds or leave rather than the following the present path leading to many years of austerity and stagnation.
Accepting that it would end up causing more inflation than the Bundesbank would like he also said that the EZ should be aiming for 5% growth if they wanted to save the day.
It would also require the German people accepting that they would have to help out all the debtor nations, which might adversely affect them.
In his judgement he said the best course overall was for Germany to either become a more ‘benevolent leading nation’ or it should leave the EZ to allow a weaker French led ‘Latin’ currency to recover.
Mr Soros said that the ECB’s new bond buying programme may help but it would only buy them some more time, not solve the longer term problems.
Image by Jeff Ooi via Wikimedia Commons, CC Attribution 2.5