Scroll down for complete HuffPost coverage of Davos.
DAVOS, Switzerland — Billionaire financier George Soros warned Wednesday that Europe could potentially fall apart because of the "two-speed Europe" of haves and have-nots that is being perpetuated by the reform of the embattled euro.
He told a news briefing on the sidelines of the World Economic Forum that the currency used by 17 EU nations is in the process of reform following concerns over the debt crisis that enveloped Greece and Ireland and is threatening others.
Its flaw, he said, of having a common central bank but no common treasury was being addressed with the creation of a permanent European Financial Stability Facility, which was created to bail out debt-ridden countries.
But Soros said the reforms are not addressing the euro's real problem – that the currency has divided the richer EU countries from the poorer ones.
"The euro was supposed to bring about convergence, and effectively it created divergence and that is now being perpetuated," he said. "So you are going forward with this new structure. You're going to have a two-speed Europe, and that is going to be politically very disruptive."
"That is the unsolved problem that I think needs to be recognized and some solution found because otherwise I think the euro is clearly here to stay. There's a clear commitment to the euro. But it could put into motion this very divisive political force of two Europes," Soros warned.
"Europe potentially could fall apart because of this two-speed Europe so it needs a solution," he said.
Soros said countries in surplus ought to be investing and expanding more in poorer European countries, but he said Germany, Europe's largest economy, can't do it because of very strict constitutional limits.
He called for a Europe-wide stimulus that can spur growth in countries that are lagging economically.
He noted that "there's a big push now on continental Europe for a financial transaction tax" which could possibly be used to help these countries as well as for other activities like fighting climate change.
Britain, which is neck-and-neck with France for the second-largest economy in the 27-member EU but not part of the euro zone, has embarked on a major austerity program to cut government spending aimed at putting it on sounder economic footing.
"I think they may be right in embarking on it," Soros said when asked about the measures introduced by the coalition government led by Prime Minister David Cameron.
"But I think they will probably have the sense that they'll have to modify it when the effects are felt," he said, "because I don't think they can possibly be implemented without pushing the economy into a recession."
Soros said the initial reaction has been "very positive" and the world will be watching to see what happens, "but my expectation is that it will prove to be unsustainable."
As for the broader global economy following the 2008 economic crisis, Soros said, "I think there was a serious danger of a deflationary trap of debt with deflation reinforcing each other, the burden of debt and prices falling."
"This has been successfully fought off, and the balance is now tipping the other way," he said.
01/28/2011 4:36 PM EST
A Handy Davos Survival Guide
After blowing the lid off the plight of Davos wives, author Anya Schiffrin has some helpful tips for surviving the sometimes-perplexing goings-on at the World Economic Forum.
First, some sleigh ride etiquette. From Reuters:
I did notice, however, that after ranting about the Republicans and the Iraq War on the way to the cheese fondue lunch, no one wanted to sit with me on the way back. Oh well. It meant I had the yummy fur-lined blanket all to myself.
And some packing tips, ranging from the practical...
A flashlight for finding my way up snowy hills when searching for my hotel in the dark of night. The main streets are lit but we don’t qualify for a hotel on the main drag. Those are saved for the really important people.
...to the even more practical:
Read the whole piece here. -- William Alden
A cell phone that works internationally so I can text message friends to rendezvous at the comfy couches in the Congress Centre and let the folks back home know which VIP is picking his nose during the Saturday night concert.
01/28/2011 3:23 PM EST
And The Prize For Most Obnoxious Party Goes To...
Felix Salmon, making the party rounds at Davos, zeroes in on the Davos Tasting put on by the Wine Forum. The party was, in Salmon's words "basically a drunken mess" with a bill that "kept on rising from its initial stratospheric level, as [one of the hosts] insisted that if he was going to throw a party, the wine must never run out and must be available in quantity." But the underlying issue, as Salmon sees it, is more significant than a sloppy, expensive party:
I’m glad that I got the opportunity to taste a bunch of these wines, even though I didn’t really appreciate most of them. Maybe to do that you need to have much more respect for point ratings or dollar prices than I do, or at least believe on a very deep level that they have a strong correlation with quality. I’m pretty certain, at this point, that my taste in wine isn’t Robert Parker’s taste, at least as it is revealed in his ratings. But ultimately events like this aren’t much about taste at all: they’re about putting down markers of various kinds and confirming in the plutocrats’ minds just how exclusive they, and Davos, really are.
Read the rest of Salmon's post here, including a list of which wines were offered.
01/28/2011 9:39 AM EST
Geithner: U.S. Economy 'Not A Boom'
At Davos, Treasury chief Tim Geithner reiterated his belief that the the U.S. economy is on the mend -- just don't expect a rousing recovery.
Here's the AP:
DAVOS, Switzerland — U.S. Treasury Secretary Timothy Geithner said Friday that his country has more confidence now that there is a sustainable expansion – but added that it is not a boom.
"There's much more confidence now that we've got a sustainable expansion," he said at the World Economic Forum, but added, "It's not a boom."
Citing six quarters of growth in the world's biggest economy, Geithner said the back of the financial crisis had been broken and that a recovery was under way, even though the jobless rate has been stubbornly high in the range of 10 percent.
"Unemployment only starts to fall when you see economies grow again. We're only a year-and-a-half into positive growth. As the economy continues this process of recovery, you'll see more people put back to work."
Read the full piece here.
01/27/2011 2:17 PM EST
The Spirit Of Science Thrives At Davos
Innovation is alive--CERN's Rolf Heuer returns from "The Science Agenda in 2011" with a renewed faith in the state of the modern sciences.
His message: innovation cannot choose between basic and applied research:
Innovation depends on a broad based approach to science, with constant interplay between the applied and basic ends of the spectrum.All of the panelists reinforced this message in different ways. Medical research, for example, without basic research in the life sciences would soon reach a dead end.
And, his surprising discovery that even the private sector believes in the necessity of global collaboration:
No single organization can assure the complete innovation chain from basic science to end product was the conclusion we drew. A piecemeal approach to science won’t work: only strong coordination between public and private sectors can deliver the scientific results we all strive to achieve.
Read more here.
01/27/2011 1:53 PM EST
U.N. Climate Chief: China Is "Winning The Green Race"
From the AP:
In a panel discussion at Davos, where some 2,500 business leaders and politicans are gathered, U.N. climate chief Christiana Figueres said China "is going to leave us all in the dust" in the transition toward a more energy-efficient global economy.The Chinese, she said, "are not doing it just because they want to save the planet. They are doing it because it's good for the economy."
The message: the U.S. will have to think green to stay ahead in the global economy:
Read the full article here.
European Union Climate Commissioner Connie Hedegaard said it's time that American businesses realize that "it's bad business to not be among the front-runners" in that race."The solutions have to come from business. They will have to come up with alternative ways of doing things," she said
01/27/2011 1:33 PM EST
Apple Dominates Davos
Amidst the titillating swarm of networking engulfing Davos 2011, Apple is spreading their gospel--for free.
The unofficial gadget of choice for world economic somebodies is that slab of technojoy we call the iPad.
The New York Times's Dealbook recounts:
The iPad has not yet banished the ubiquitous BlackBerry. But it received an ostentatious Davos product placement (unpaid, one would assume) on Wednesday night when President Dmitri A. Medvedev of Russia whipped one out during the question-and-answer session that followed his keynote address.
Read more here.
01/27/2011 1:27 PM EST
The <em>Other</em> Davos Challenge
Besides contemplating world-wide high unemployment and the mounting debt crisis, those gathered in at the Swiss ski resort have another problem to consider: dressing for the snow.
The Wall Street Journal raises the issue delicately:
The world's business leaders appear to have spent very little time worrying about what to wear.
Some of us are wasting hours a day changing from snow boots or green rubber boots to more elegant shoes and back again, in order to rush through Davos's snowy streets from a meeting in one hotel to lunch at another.
As Davos is held at a ski resort, it's hard to imagine that snowy conditions were entirely unanticipated. Nevertheless. The Journal continues:
there are interesting nuances to be detected in the choice of footwear. The more conservative, or perhaps the more aesthetically inclined, have donned short but sturdy boots which, when worn with a suit, could pass for shoes unless subjected to close examination. Others are shameless, ordaring, pairing formal suits with robust hiking boots or shiny running shoes.
-- Lila Shapiro
01/27/2011 1:23 PM EST
Does The World Have Too Little Content?
The Internet is a content machine.
But does the world have too little unique content?
That's what Jeff Jarvis takes away from Davos 2011, seizing on an automated content-creating technologies Phillip Parker is creating to "to fill in knowledge that is missing in the world, especially in smaller cultures and languages."
We have our fill of news aggregates spitting out autocontent, but what if those same technologies can help us create a better network of information?
I'm fascinated by what Parker's project says about our attitudes toward content: that we in the West think there's too much of it (we're overloaded); that content is that which content creators create; that content has to be owned; that it has to be inefficient and expensive to be good and useful.
Read more here.
01/27/2011 9:54 AM EST
JPMorgan Chief's Temper Tantrum
When Fareed Zakaria asked him a question at a Davos panel, he lashed out. From Reuters:
"Not all banks are the same and I just think that this constant refrain 'bankers, bankers, bankers' is just unproductive and unfair. People should just stop doing that."
At one point he was nearly shouting, according to the Wall Street Journal:
“J.P. Morgan bought Bear Stearns because the United States government asked us to!"
-- William Alden
01/27/2011 8:58 AM EST
The Plight Of 'Davos Mistresses'
"The point about Davos is that it makes everyone feel wildly insecure. Billionaires and heads of state alike are all convinced that they have been given the worst hotel rooms, put on the least interesting panels and excluded from the most important events/most interesting private dinners. The genius of World Economic Founder Klaus Schwab is that he has been able to persuade hundreds of accomplished businessmen to pay thousands of dollars to attend an event which is largely based on mass humiliation and paranoia.
Wives feel sympathetic to their husbands and share their pain. But we have our own problems to cope with. After all, we are the on the bottom rung of the Davos ladder."
And the toll it takes on mistresses:
But if wives have it bad, mistresses, who are invited under a variety of guises and usually wind up with a white name tag, have it worse. Typically their men are swallowed up by a tsunami of meetings and interviews and don’t have the time or inclination to take their mistresses around with them. Often these men go to high-level dinners to which wives and mistresses are not invited. The skinny and beautifully dressed Davos Mistress typically hangs around the auditoriums waiting for a couple of minutes with her man. While waiting, she keeps her eyes peeled looking to search and destroy the competition.
Read the full piece here.
More:Euro Crisis George Soros Davos 2011 World Economic Forum European Financial Stability Facility
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