Soros: “German Parliament Imposed Wrong Discipline On Spain”

He made millions speculating against the British Pound in the 90s -the currency crashed-,  is well known for his doubts about the euro, although he recently acquired part of FCC, following the last trend of foreign investors coming to Spain to buy cheap.

George Soros talked to the press in London to promote his new book, The Tragedy of the European Union, on Tuesday. And he did not miss the chance of making his point about the EU, the crisis and the recovery again.

*On Germany:

Soros pointed out that Berlin is experiencing a leadership crisis. The euro zone’s biggest economy should lead so the union could leave the recession behind. And yet, it is not doing enough. And their strategy of imposing too much austerity on its neighbours like Spain has been a mistake.

“Their memory is inflation, so they continue fighting inflation when the threat is deflation,” he told the BBC.

“Austerity is counterproductive, since it feeds deflationary pressure and makes it difficult to countries like Spain to meet its obligations as a debtor (…) The debtors can’t pay their debts and are dependent on their creditors’ mercy, and that creates a two-class system. It’s not voluntary and it’s not equal.”

“Decisions are not already taken by consensus. The German Parliament imposes policies to Spain, although the Spanish Parliament doesn’t have a say about the German one”, said Soros.

 

*On monetary policy:

“That definition [on the European Central Bank at the Maastrich Treaty] was a bad one and actually doesn’t allow the central bank to function as a lender of last resort, and without it there is a danger we will have some kind of financial crisis again.”

 

*On what’s next:

Europe is just entering a long period of stagnation and may not survive 25 years of stagnation.