George Soros: Three Steps to Avoid a Second Depression
George Soros, Chairman of Soros Fund Management and of the Open Society Institute, believes the country is headed toward a second depression and has provided three steps to avoid it.
Soros wrote in an article published by the Financial Times that the financial markets are driving the world toward another Great Depression and that the authorities have lost control over the situation.
He continued by outlining three steps he believes would rectify the situation, writing, “Three bold steps are needed. First, the governments of the eurozone must agree in principle on a new treaty creating a common treasury for the eurozone. In the meantime, the major banks must be put under the direction of the European Central Bank in exchange for a temporary guarantee and permanent recapitalization. Third, the ECB would enable countries such as Italy and Spain temporarily to refinance their debt at a very low cost.”
These steps, he says, will “calm the markets and give Europe time to develop a growth strategy without which the debt problem cannot be solved.”
He argues that these steps will help bring the euro crisis to an end by “ staunching its two main sources,” which he defines as weak banks and vulnerable sovereigns,” and by “reassuring the markets that a longer-term solution is in sight.”
“Kicking the can down the road” has brought us “to the end of the highway,” said Soros.