Billionaire investor George Soros said a collapse of the euro and breakup of the European Union would have "catastrophic" consequences for the global financial system.
"Today, the euro is potentially endangering the political cohesion of the European Union," the Business Line newspaper cited Soros as saying in the south Indian city of Hyderabad.
"If the common currency were to break down, it will lead to the breakup of the European Union itself. And this will be catastrophic not only for Europe but also for the global financial system."
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The eurozone crisis is "more serious and more threatening than the crash of 2008," the Economic Times reported, quoting Soros.
Leaders in the 17-nation euro region have struggled to solve a sovereign-debt crisis that’s hampered the global recovery and is now in its third year.
Greece, Ireland and Portugal have already been forced into bailouts and the European Central Bank has provided unprecedented cash injections, easing borrowing costs for Italy, Spain and Belgium.
Soros said it isn’t currently clear whether the crisis will be contained, adding many people “feel” it’s “over the brink” and “insolvable.”
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George Soros
(Getty Images photo)
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The euro fell to a 15-month low against the dollar on concern the region’s governments and banks will struggle to raise funds. It weakened 0.5 percent to $1.2875 at 9:38 a.m. London time, after falling as much as 0.7 percent to $1.2848, the least since September 2010.
Markets are “far from equilibrium and extremely difficult to predict using the yardsticks or methods that were used in the past,” Soros said, adding investors “have to play it safe” and that “unless you can anticipate events correctly, it’s better to do nothing than to keep on losing money.”
Some of the eurozone countries may have to take more austerity measures because of the imbalances between the "creditor and the debtor countries," Soros said at a business school event, the Mint newspaper reported.
"Unfortunately, they haven't yet solved the acute financial crisis and that is causing the situation to deteriorate...and (it) is not at all clear it will have a solution," he said.
Soros is best known for making $1 billion in 1992 betting the Bank of England would be forced to devalue the pound. He has given away more than $8 billion in the last 30 years to promote democracy, foster free speech, improve education and fight poverty around the world, he said in a recent essay.
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