Tatsiana Ketrar
George Soros, the world-famous investor and billionaire, urges Germany to make a crucial decision. In particular, he says German authorities should change their attitude towards common Eurobonds or quit the eurozone.
Soros says that the positive effect of Eurobonds would be amazing. He assumes that it would be great if weak European economies got a chance to convert their debts into common bonds. This would eliminate the risk allowance and the possibility of defaults. This would also improve the budgets of risky economies as well as the balance sheets of their banking systems.
Mr. Soros assumes that in this case Eurobonds could be compared to the bonds emitted by the USA, Great Britain and Japan instead of affecting Germany’s credit rating (as Germans think).
However, Angela Merkel vetoed Eurobonds. Therefore, such decision looks impossible at this point. Germany is still against Eurobonds.
Still, Mr. Soros says that common Eurobonds would be a cheaper and less risky solution than simply trying to keep the eurozone alive by conventional means like constant bailouts. He says. Germany has the right to abstain from emitting common Eurobonds. However, it has no right to forbid other eurozone members with big debts to unite and emit common bonds.
He concludes that Germany should seriously consider an exit from the eurozone if it keeps rejecting Eurobonds. George Soros believes that common eurozone could be compared to the bonds emitted by Japan or the UK even without Germany being involved.
Tatsiana Ketrar
