BILLIONAIRE financial speculator George Soros warned yesterday that the German economy is going to totter in the Autumn, when the crisis will ‘come to a climax’ and claimed that there are just three months before the euro could collapse.
And Nobel Laureate in Economics Eric Maskin said he thought that things would get ‘much worse for Greece’, where unemployment could reach ‘astronomical heights’.
Stock markets continued to plunge yesterday, following their sharp falls in the previous session.
Germany’s Dax index dropped 1.4%, France’s Cac 40 opened lower, Japan’s Nikkei 225 closed down 1.7%, South Korea’s Kospi dropped 2.8% and Australia’s ASX 200 fell 1.9%.
The oil price also fell, with Brent crude dropping $1.12 a barrel to $97.20 following a fall of $3.44 on Friday and US light crude fell by $1.10 to $82.16.
Soros said European leaders have a ‘three-month window’ to save the euro.
He said leaders did not understand ‘the nature of the crisis’.
He said that while European leaders were focusing on debt levels, the crisis was ‘more of a banking problem and a problem of competitiveness’.
For this reason, he said they had ‘applied the wrong remedy’.
‘You cannot reduce the debt burden by shrinking the economy, only by growing your way out of it,’ he added.
Speaking at a conference in Italy, Soros said without policies to boost growth, which would enable governments to raise revenue to pay down debt, time was running out for the euro.
‘I expect the Greek public will be sufficiently frightened by the prospect of expulsion from the EU that it will give a narrow majority of seats to a coalition that is ready to abide by the current (bailout) agreement,’ he said.
‘The crisis is likely to come to a climax in the autumn,’ he continued.
‘By that time, the German economy will also be weakening, so that Chancellor Merkel will find it even more difficult than today to persuade the German public to accept any additional European responsibilities.’
Meanwhile, in an interview on Russia Today TV Eric Maskin said the future ‘could be very bad for Greece’.
The interviewer asked: ‘What, like civil war, revolution?’
Maskin replied: ‘Well, again you’re asking me to make a political prediction.
‘It could get very much worse economically. Greece could go into a longterm depression.
‘Unemploment could grow to astronomical heights, it’s already very high but it could certainly get higher.
‘Things are by no means currently as bad as they could get.’
