Quote:
Originally Posted by Trader5
There is no clear cut solution so far for the Euro Zone.
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In my opinion, there is no solution for the Euro Zone except to break it up.
If done in an orderly manner, things could normalize in 2-3 years.
If not, everything will implode.
The PIIGS make up a
third of Euro Zone's GDP. The proportion of debt issued by them is even higher.
This debt is well distributed among European banks. If things get out of control, it will all end up in a big mess.
I think the best solution is to let the weakest economies exit one by one and then try to stabilize the Euro Zone.
Quote:
"It is a more dangerous situation [than Lehman Bros] and I think that the authorities, when push comes to shove, will do whatever it takes to hold the system together, because the alternative is just too terrible to contemplate," he added
A number of smaller euro zone nations could default and leave the single currency area, Soros said, but he warned if it happened on an ad hoc basis, there would be considerable risk to the global economy.
"I think that you could have two or three of the small countries default or leave the euro provided it is prepared and done in an orderly way," Soros said.
"If it were to happen unprepared it could actually disrupt the global financial system, but that's why it's important to allow for it to happen and then those countries have a genuine choice it doesn't mean they are being pushed out."
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Soros: US is already in double-dip recession - CNBC -