Soros: Even With A Bailout, Greece Could Create A European Death Circle


Even if Europe bails out Greece, they need to be careful that they don’t set interest costs too high for the nation, else even their bailout could spark a destructive cycle:


“I think it is necessary because the market interest rate is really far too high to make it possible for Greece to meet the conditions that are required of it,” the billionaire told Skai’s Folders news show, according to a transcript provided to Reuters.

Soros said it was regrettable that Germany had insisted on an interest rate of as much as 5 per cent for the aid package because it would water down the bailout’s impact.

There was a “real danger” that such a high rate would cause Greece to cut its budget further, hurting economic activity and eventually undermining budget revenues, he said.

“Then it becomes a vicious cycle,” he said. “I would call it a death circle. That’s really the danger.”

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