In a new book, George Soros claims that German economic policy is ‘self righteous’ and ‘hypocritical,’ which is not good for the European Union. In his interview with Dr. Gregor Peter Schmitz, Soros said that Europe is now suffering from the issues between ‘creditor’ and ‘debtor’ nations. The interviews with Soros are compiled in the book “The Tragedy of the European Union.”
“But with the passage of time, Germany may become hated and resisted as an exploiter, and the European Union may dissolve in acrimony,” says Soros.
Germany a threat to EU
According to Soros, Europe has lost its voluntary state status owing to the advent of the single currency system. The region is no longer a voluntary association of equal states with Germany as its leader.
“Germany’s tone is sometimes self-righteous and even hypocritical,” Mr. Soros says. “In 2003, Germany was among the first countries to break the eurozone rules.”
Soros stated that Germany has hiked the minimum wage and pensions along with creating the provision of earlier retirement, but is suggesting other countries to do the opposite. The billionaire believes that the German economy “at the region’s heart” may prove region’s weakness.
In the book, Soros stated that the policies and strategies on the basis of which Germany thrived before crisis will not be successful for other geographies of the Europe in the coming years.
According to Soros, the chances of Germany exiting from the European Union are very high, which would dramatically decrease the value of the euro and increase the value of the Deutsche mark. In the book, Soros states that Germany will then get to know how critical it is to have an overvalued currency.
European banking needs reform: Soros
In the book, Soros also talked about the problems that triggered the eurozone economic crisis and how the banking sector is acting as a parasite on the real economy.
Soros said that the profitability of the finance industry is too high, and around 35% of all corporate profits in the United Kingdom and the United States came from the industry. He said that nothing much has been done to rectify the sky-high leverage in the European banking system, which still carries lower equity compared to the size of the balance sheet.
“The issue of ‘too big to fail’ has not been solved at all,” he says.