Billionaire investor George Soros predicts that the euro will survive, but cautions that Europe is likely to become "a German empire."
In a speech in Italy on Saturday, Soros said that the survival of the euro probably will lead to a prolonged depression in southern Europe, but northern Europe will continue to do well economically.
The outcome would be that the South -- including Spain, Italy and Greece -- would require a constant influx of cash from their northern neighbors. "It would be a German empire with the periphery as the hinterland," Soros said of the European Union.
He said the eurozone is likely to survive because a breakup would be "devastating" for its member states, including Germany, noting that "Germany is likely to do what is necessary to preserve the euro –- but nothing more."
Soros has been sounding the alarm about the eurozone crisis for months. In the words of Felix Salmon, Reuters' financial blogger, Soros was "the winner by far of the most-talked-about-person-in-Davos award" at the World Economic Forum meeting in Davos in January "because he's happy being brutally honest, and because he's giving voice to the plutocrats' darkest fears."
Here is a sampling of other quotes by Soros over the past several months about the eurozone crisis and the global economy:
"The crisis has entered what may be a less volatile but potentially more lethal phase." [Project Syndicate]
"Germany is acting as the taskmaster imposing tough fiscal discipline.... This will generate both economic and political tensions that could destroy the European Union." [WSJ]
"Without a clear game plan, Europe will remain mired in a larger vicious circle, in which economic decline and political deterioration continue to reinforce one another." [Huffington Post]
"We are facing an extremely difficult time, comparable in many ways to the 1930s, the Great Depression. We are facing now a general retrenchment in the developed world, which threatens to put us in a decade of more stagnation, or worse. The best-case scenario is a deflationary environment. The worst-case scenario is a collapse of the financial system." [Newsweek]
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