Watch George Soros tell Chrystia why he thinks it will take years for Germany to realize that Europe needs additional stimulus and why he would be loading up on Italian government bonds if he were still an active investor.
Canadian Finance Minister Jim Flaherty stopped by the Reuters studio this morning to chat with Chrystia about the impact of Europe’s debt crisis on Canada. He said the situation in Europe “poses a danger” and that if it gets out of control, the crisis could lead to a repeat of what happened to the financial markets in 2008. He urged the Europeans to follow the course America took in 2008 and substantially increase the amount of capital in the stabilization fund:
Jim Flaherty: They should imitate what the Americans did quite frankly in 2008 and create a situation where the markets regain confidence in sovereign debt and banking situations. And that means a substantial fund put together or they could do it with bonds and that’s been another suggestion, but a substantial pool that would make it clear that they would be able to defend and protect sovereigns and banking systems in Europe.
Chrystia Freeland: And that pool should be bigger than the one they have now?
Jim Flaherty: Yes
Chrystia Freeland: How much?
Jim Flaherty: Well, I’ll leave that, you know, for them to decide but it needs to be such that the markets would have full confidence, so substantially more than it is right now.