Soros Says Europe Must Confront Absence of Treasury
Billionaire investor George Soros said the 16-member euro region economy must confront the problem created by the absence of a central Treasury.
“I don’t think a breakup is possible,” Soros said in an interview in Dubai today. “But the lack of a Europe-wide Treasury — you have a central bank but you don’t have a central Treasury and don’t have supervision of the currency that’s unified — those are issues that need to be confronted.”
Europe’s faltering economy is pushing up bond yields in countries including Italy, Spain and Greece, making European Central Bank rate cuts less effective and sparking concerns of a region breakup. While the U.S. Federal Reserve and the Bank of England have purchased government securities to counter the crisis, economists say that the lack of a European Treasury makes it difficult for the ECB to adopt unconventional tools payday loans with low fees.
ECB council member George Provopoulos said yesterday that buying government bonds in the secondary market “might constitute a direct monetary finance of fiscal deficits, which isn’t allowed by the ECB’s rules.” The ECB’s “position is that every country is responsible for resolving its own fiscal difficulties,” he said.
Soros, who made $1 billion selling the pound in 1992, said he’s “not currently taking any positions in the currencies.”