George Soros says EU may not survive coronavirus crisis
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[May 22, 2020] By
Guy Faulconbridge
LONDON (Reuters) - Billionaire financier
George Soros said the European Union could break apart in the wake of
the new coronavirus pandemic unless the block issued perpetual bonds to
help weak members such as Italy.
The novel coronavirus, which emerged in China last year, has stalled
swathes of the global economy while governments have ramped up borrowing
to levels not seen in peacetime history.
Soros, 89, said the damage to the euro zone economy from the new
coronavirus would last "longer than most people think", adding that the
rapid evolution of the virus meant that a reliable vaccine would be hard
to develop.
The hedge-fund veteran and chairman of Soros Fund Management LLC said
perpetual bonds, used by the British to finance wars against Napoleon,
would allow the European Union - itself created out of the ashes of
World War Two - to survive.
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"If the EU is unable to consider it now, it may not be able to survive
the challenges it currently confronts," Soros said in a transcript of a
question-and-answer session emailed to reporters. "This is not a
theoretical possibility; it may be the tragic reality."
The comments were approved by Soros for publication on Friday, a
spokesman said.
Soros, who earned fame by betting against the pound in 1992, said that
with major countries such as Germany selling bonds with a negative
yield, perpetual bonds would ease a looming budget crunch across the
bloc.
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![](../images/052220pics/busine33.jpg)
Billionaire investor George Soros speaks to the audience at the
Schumpeter Award in Vienna, Austria June 21, 2019. REUTERS/Lisi
Niesner
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He said the EU would have to maintain its 'AAA' credit rating to issue such debt
- and thus have to have tax-raising powers to cover the cost of the bonds - so
suggested it could simply authorise the taxes rather than imposing them.
"There is a solution," said Soros. "The taxes only have to be authorized; they
don’t need to be implemented."
Asked about Brexit, Soros said he was particularly worried about Italy: "What
would be left of Europe without Italy?"
"The relaxation of state aid rules, which favour Germany, has been particularly
unfair to Italy, which was already the sick man of Europe and then the hardest
hit by COVID-19," Soros said.
Soros fled Hungary when the communists consolidated power in 1947 and ended up
at the London School of Economics. His Quantum Fund made huge profits in 1992
betting that sterling was overvalued against the Deutsche Mark, forcing the
British to pull the pound out of the European Exchange Rate Mechanism.
(Editing by Michael Holden and Hugh Lawson)
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