GEORGE SOROS WARNS OF UNFEASIBILITY OF EU BAILOUT PROGRAM FOR GREECE

 

Billionaire financier George Soros has thrown his hat in the discussion about EU bailout policies, and in regards to Greece he is being very clear: Greece will never be able to repay its debt at the current austerity conditions.

In fact, a previous article in this blog had noted how almost 100% of income generated in Greece by taxation is going to pay the interest of the bailout, while payment of the principal will not even commence for decades.  And the recent request for refinancing of that debt by Greece has pushed that date to service the capital of the loan even further into the future.

What Soros is proposing, and it is logical, is that Greece be forgiven or delayed part of the debt repayment, so that it can grow and prosper while at the same time slowly repaying its debts.

There is no way that Greece can grow economically with such a burden around its neck.  The economy is contracting further with each additional austerity requirement imposed by the lenders, and unemployment is through the roof.  Without any money being put back in the system, Greece will spiral into even greater debt. 

The first glimpse of a monetary budget surplus just manifested itself this year.  But at what cost?

What Soros proposes however, is quite radical.  He says that Greece should continue with the austerity requirements of the EU troika of money lenders, but its debts suspended or reduced.  If that occurred, Soros says, investors would flock to Greece, and the country could return to the positive side again. 

But he warns that these measures, or whatever relief is adopted, must be done soon.  He also says that lower rates and longer term debt repayment are a must for the Greek economy to survive and thrive.

He especially addresses his plea to Germany, the major of the three lenders of the bailout package, which as he says, benefited three times from a similar relief program from the Dawes to the Marshall plan after World WAr II, and so should more than any other country in good conscience understand Greece's needs.  He also warns that the Golden Dawn, the neo nazi party in Greece, has arisen through much of the same premise as Hitler's Nazis, which came to power campaigning on the refusal of the austerity imposed at the treaty of Versailles. 

Source : Spiegel / 10.8.13