WHOEVER TAKES POWER after the forthcoming general election has no option but to seek a renegotiation of the bailout deal with the EU and International Monetary Fund, according to international financier George Soros.
Writing in today’s Financial Times (subscription required), Soros said the next government “is bound to repudiate the current arrangements. Markets recognise this and that is why the Irish rescue brought no relief.”
The high interest rates being charged on the bailout funding make it almost impossible for weaker countries to make themselves more competitive, while they are hampered by their high interest rates.
“Divergences will continue to widen and weaker countries will continue to weaken,” Soros – known for supporting market liberalisation – wrote. “Mutual resentment between creditors and debtors is liable to grow and there is a real danger that the euro may destroy the political and social cohesion of the EU.”
In a broad opinion piece which is further damning to Ireland, Soros says that states should abandon their general principle of backing the debts of their banks, saying taxpayers are already having trouble sustaining the burden of public debt.
The Irish Independent says he has since become better known as a critic of the dangers of a globalised banking system.
Soros, who is worth about $14.2bn according to Forbes magazine, kickstarted his wealth when he made almost $1bn after correctly predicting that the Bank of England would devalue the pound in 1992.
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