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European treasury needed to avoid Depression: Soros

15 September 2011 13:32 (UTC +04:00)

Baku - APA-Economics. Billionaire investor George Soros has warned Europe’s debt crisis risks triggering another Great Depression unless euro zone leaders adopt a series of radical policy measures, including the creation of a common treasury.

Soros, in an article for the New York Review of Books and Reuters.com, says policymakers must prepare for the possibility that Greece, Portugal and perhaps Ireland will have to default and leave the euro zone.

"It appears the authorities have reached the end of the road with their policy of ’kicking the can down the road’," he says.

"Even if a catastrophe can be avoided, one thing is certain: the pressure to reduce deficits will push the euro zone into prolonged recession. This will have incalculable political consequences." He also recognizes it would be deeply controversial, especially in Germany, where there is strong opposition to underwriting the debts of what are seen as profligate southern European nations.

"The German public still thinks that it has a choice about whether to support the euro or to abandon it. That is a mistake," he writes.