Soros: euro crisis may damage European Union

Hungarian-born American billionaire investor György (George) Soros said in Budapest this Thursday that the current euro crisis has the potential to destroy the cohesion of the European Union, mainly due to its political nature. The lecture he delivered was entitled "Reflexivity at work in the European Union".

Speaking at the Central European University he once founded, Soros said “the euro crisis is primarily a banking crisis, secondarily, a government debt crisis. These are inter-connected and mutually reinforce each other.” There is also a political face to the crisis, he added.

He warned of “a process of disintegration,” which was a real threat to the political union, Soros said. However, he stressed the importance of saving the euro, saying the common currency has by now grown to an extent that it is impossible to go back to separate currencies again. “You can’t unscramble the omelet,” he said.

He added that EU leaders failed to find a quick solution to the euro crisis because they did “too little too late”. Before the establishment of the European Financial Stability Facility (EFSF), the EU did not have any kind of something like a common treasury.

As for the Greek crisis, György Soros said “a reorganization, or default must be orderly” and Greek banks should be kept alive to protect depositors. Europe now must be given stimulation to reorganize itself at a political level he added.