A collapse of the euro — currently the greatest threat to global economic health — and break-up of the European Union would have catastrophic consequences for the global financial system because of inter-connectedness, Business Line newspaper cited billionaire investor George Soros as saying.
“Today, the euro is potentially endangering the political cohesion of the European Union….Certain inadequacies in designing the [currency] have led to the euro-zone crisis that looms large over world economies” Soros said at an interactive session in the south Indian city of Hyderabad.
“If the common currency were to break down, it will lead to the break up of the European Union itself. And this will be catastrophic not only for Europe but also for the global financial system.”
The euro-zone crisis is “more serious and more threatening than the crash of 2008”, the Economic Times reported, quoting Soros.
Soros said that some European countries have to adopt more austerity measures to narrow imbalances between “creditor and the debtor countries”.
Paris-based OECD warned several weeks ago that the collapse of the EU currency could send the world’s advanced economies into a severe recession, dragging EMs with them into the mire.