The Hungarian-born US billionaire and financier George Soros finds “Greek default may be inevitable,” according to his latest column in the UK daily Financial Times. Precautionary measures need to be taken to localize the debt crisis to the so-called PIGS group – Portugal, Ireland, Greece and Spain. For that, however, the Europeans should move to create an EU Finance Ministry, Soros wrote. Unless this is done, the European Central Bank will continue to work at half its capacity and the euro will remain unstable.
Also, Soros suggests introducing an all-European system of bank deposit guarantees. Further centralization of the EU seems to be the only right move, he says. While having its own central bank but no Finance Ministry, the EU has to look for a solution confined to the framework of national market regulations, rather than all-European regulations.
The architects of the European Union have obviously overestimated the ability of some member states for self-control. Certain countries went recklessly on a borrowing spree, and now the whole of Europe has to bail them out. This has sparked anger and social discontent and prompted calls for de-integration. Unless this trend is reversed, Soros says, the eurozone’s collapse looks almost inevitable.