Business | Economy
Greek bailout 'won't get Europe out of danger'
Billionaire investor George Soros predicted weak growth and lingering political tension that could shatter Europe's economic union even if Greece agrees to austerity measures
- Bloomberg
- Published: 00:00 February 13, 2012
Athens: Billionaire investor George Soros predicted weak growth and lingering political tension that could shatter Europe's economic union even if Greece agrees to austerity measures.
"Right now the European Union and particularly the heavily-indebted countries face a lost decade," Soros said.
"It might actually be longer than a decade because Japan that had a similar situation with the real estate boom and the banking crisis has had now 25 years of no growth," Soros said.
"That will create tensions within the European Union, which could destroy the European Union," he said. "And that's a real danger."
Soros spoke in an interview taped on Thursday for CNN's Fareed Zakaria GPS which was aired yesterday.
A package of budget, wage and pension cuts that Greece's parliament could adopt is "not necessarily going to work in the long run," Soros said. "But it will certainly buy you another six months of quiet on the Greek front."
Aid package
"Greece is a sick situation" that has been "mishandled" by European authorities and "will continue to be an irritant and a problem for Europe," Soros said. The European Union, once a desirable objective, has become "more of an imposition."
The interim government of Greek Prime Minister Lucas Papademos on Friday approved budget cuts needed to secure a second package of aid from Euro-zone finance ministers, preparing the way for a ratification vote in parliament yesterday.
In the US, the economy "shows some signs of revival," thanks in part to the emergence of shale gas and oil and years of low-wage growth, which have lowered manufacturing costs, Soros said.
President Barack Obama, who has done a "mixed job", deserves a second term, Soros said.
"The problems that he inherited, because he came in immediately after a financial crisis, were bigger than any president could have immediately remedied."
More from Economy
More from Business
Business Editor's choice
-
China breaks West's solar monopoly
Some countries in the world, especially Germany and the United States, have made considerable efforts to invest in developing solar energy cells
-
Burberry store spree will cut profit
Trenchcoat maker forges ahead with investment strategy targeting emerging markets
-
Laws needed to spur region bond markets
UAE Central Bank calls for creation of a centralised Sharia board to facilitate the sale of sukuk
