“Germany is going to smell like roses but (the rest of) Europe is going to be pushed into a downward spiral, stagnation lasting many years and possibly worse than that,” George Soros said in 2010. And what he predicted is now taking place.
So it’s worth reviewing what he said three years ago: “The euro’s lack of a correction mechanism or of a provision for countries to leave it could be a fatal weakness”, he said.
German model implemented on all Euro countries
Germany has now imposed its ideas on how a 750 billion Euro zone rescue mechanism should be used. In other words, the rest of the Euro member states have to follow in Germany’s footsteps and have a trade surplus as well as a high savings rate.
“That’s the real danger of the present situation — that by imposing fiscal discipline at a time of insufficient demand and a weak banking system, by wanting to have a balanced budget you are actually … setting in motion a downward spiral,” he said.
Like between World War I & World War II
“If there is no exit, (it) is liable to give rise to social unrest and, if you follow the line, social unrest can give rise to demand for law and order and (sow the) seeds of what happened in the inter-war period,” Soros said.
No interest in a Federal Europe
His conclusion is that “Political will to forge a common fiscal policy in Europe is absent and since Europe is liable to move backwards if it did not advance, the crisis of the euro could then actually have the potential of destroying the European Union,”.
His analysis based on the flaws of the Euro from the start is correct and I agreed with him in 2010, and still do. Not least since what he said is happening. It is my hope though that it will not lead to social unrest, but he may very well be right. Europeans have throughout their lives paid for their pensions, health care and all kinds of other services. Governments turning around and telling the electorate that they can not get what they have paid for isn’t ging down very well.
The danger of poverty
If Europe continues to implement austerity measures and poverty increase, the situation in Europe could turn ugly. And if so, needless to say, social unrest will take place and more and more political parties with extremist ideologies will see the light of day. And what’s worse, they will be successful. It would consequently be beneficial if the EU would listen to the IMF and stop implementing austerity. What needs to be done is stimulating European economies to start growing again, create jobs and bring back prosperity to the people of Europe.
Do you believe that George Soros is right that the Euro crisis coupled with the current state of the world could eventually destroy the entire European Union? Or maybe only the Euro but not the whole European Union? Do you believe the Euro is worth saving? Would stimulating the European economies create jobs and bring back prosperity? Or do you believe austerity will do the trick?