Tags: Soros | Euro | Destroy | Economy

Soros, European Elders: Don’t Let Euro Destroy Economy

Wednesday, 12 Oct 2011 07:29 AM

Billionaire investor George Soros and 95 politicians, business leaders and academics are urging European policymakers to create a eurozone treasury and take other steps to make sure the continent's financial system doesn't implode.

In a letter published in the Financial Times, Soros and others say failure to take meaningful action could unravel the global financial system and damage an already fragile world economy.

European policymakers are working to expand a European Financial Stability Facility to assist troubled member nations, but need to do more.
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"The current measures are too little and too late and are precipitating global financial turmoil. The euro is far from perfect, as this crisis has revealed. But the answer is to fix its faults rather than allowing it to undermine and perhaps destroy the global financial system," Soros and the other dignitaries write, including ex-German finance minister Hans Eichel, former French foreign minister Bernard Kouchner and Pedro Solbes, who was once EU Economic and Monetary Affairs Commissioner.

On top of a new, common treasury that would raise funds for the eurozone as a whole and ensure that member states maintain fiscal discipline, European policymakers need to reinforce supervision, regulation and deposit insurance and also develop a strategy to produce both economic convergence and growth.

"The debt problem cannot be solved without growth."

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George Soros
(Getty Images photo)
"We call upon the legislatures of the eurozone countries to recognize that the euro needs a European solution. The pursuit of national solutions can only lead to dissolution."

Before a new treasury is created, eurozone governments must empower the European Financial Stability Facility and the European Central Bank (ECB) to co-operate in bringing the crisis under control, Soros and others urge.

"These institutions could then guarantee and eventually recapitalize the banking system and enable countries in need to refinance their debt, within agreed limits, at practically no cost by issuing treasury bills that can be rediscounted at the ECB."

Slovakia, meanwhile, rejected expanding the EFSF, although hope remains among other European Union nations that lawmakers there will change their minds.

"The world economy is heavily affected by the financial crisis and every EU country must contribute its share to the fight against the debt crisis," says German Chancellor Angela Merkel, according to the AFP newswire.

Slovakia is the only eurozone country to reject beefing up the 440 billion euro rescue fund, which was created to bail out distressed nations, including Greece in May 2010.

French Foreign Minister Alain Juppe said Slovakia's rejection was "not good news" but was confident a second vote will soon follow and approval will ensue.

"We ardently hope that this vote will be positive because we must put in place all the measures decided in July (at a eurozone summit), which are fundamental to rescuing Greece and reinforcing the eurozone," Juppe tells France Info radio, the AFP adds.

European Central Bank chief Jean-Claude Trichet says politicians need to make "clear decisions" to navigate the continent out of the debt crisis or face systemic risk.

"The high inter-connectedness in the EU financial system has led to a rapidly rising risk of significant contagion. It threatens financial stability in the EU as a whole and adversely impacts the real economy in Europe and beyond," Trichet says, according to the AFP.

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Billionaire investor George Soros and 95 politicians, business leaders and academics are urging European policymakers to create a eurozone treasury and take other steps to make sure the continent's financial system doesn't implode. In a letter published in the Financial...
Soros,Euro,Destroy,Economy
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2011-29-12
 

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