Greece “now a lose-lose game and the best that can happen is actually muddling through,” and there’s a 50-50 chance that the country will exit the eurozone, according to multi-billionaire investor George Soros.
That’s according to an as-yet unpublished video with Bloomberg, in which Soros apparently said the country “is going down the drain”.
“It’s now a lose-lose game and the best that can happen is actually muddling through,” Soros, 84, said in a Bloomberg Television interview due to air Tuesday. “Greece is a long-festering problem that was mishandled from the beginning by all parties.”
The negotiations between Tsipras’s Syriza government and the institutions helping finance the Greek economy — the European Commission, European Central Bank and International Monetary Fund — could result in a “breakdown,” leading to the country leaving the common currency area, Soros said in the interview at his London home.
“You can keep on pushing it back indefinitely,” making interest payments without writing down debt, Soros said. “But in the meantime there will be no primary surplus because Greece is going down the drain.”
“Right now we are at the cusp and I can see both possibilities,” he said.
Greece is currently on a knife-edge — the government has about two weeks until it runs out of money, according to European Commission documents seen by German newspaper FAZ. After that it has an IMF debt repayment to make.
Though the Eurogroup (the group of eurozone finance ministers) agreed a tentative extension to Greece’s bailout at the end of February, the country still hasn’t produced the detailed action plan that Europe wants before it actually releases the €7.2 billion ($US7.87 billion) tranche agreed.
The government in Athens has given itself one week to release this list of reforms, but even then, there’s no guarantee that the Eurogroup will accept what’s presented.
And in fact, this is just the preamble to the real showdown — Greece is just negotiating a four month extension to its existing bailout to give itself time to try to arrange further talks on the country’s debt burden — something that Europe, by and large, doesn’t want.