Opinion

Chrystia Freeland

Soros: The euro zone is about more than money

Chrystia Freeland
Sep 13, 2012 21:12 UTC

George Soros made headlines this week with a striking proposal that to save Europe, Germany must “lead or leave.” The leadership part was familiar: Outside Germany, at least, it is becoming conventional wisdom that Europe will survive only if the Union’s behemoth provides more decisive leadership — and writes bigger checks.

The catch is that the rest of Europe, particularly its beleaguered so-called Club Med countries, doesn’t seem to be in much of a position to coerce Berlin to do anything. That is where Soros’s second alternative — leaving — comes in. In an interview in Vienna last weekend and in a speech in Berlin on Monday, Soros added his influential voice to a cluster of iconoclasts who have asserted that Southern Europe’s fate need not be decided in Germany.

If Germany is unwilling to lead, Soros argues, the Southern Europeans should ask Germany to leave. His prediction is that these currently sickly nations would do perfectly well.

“If Germany left, the common market could hold together and actually it would be a remarkable relief,” Soros told me. “The euro would fall in value, so the debt which is denominated in euro would also fall in value and the competitiveness of the debtor countries compared to Germany and the other creditor countries would greatly improve.”

In this scenario, the Club Med countries would benefit partly from the inflation and currency devaluation that their existing monetary marriage to Germany precludes. Their renaissance would also be based on their economic fundamentals, which Soros argues are strong but are being discounted by the markets because of the existing fiscal and monetary straitjacket.

‘Kumbaya’ capitalism collides with self-interest

Chrystia Freeland
Jan 26, 2012 23:11 UTC

DAVOS, Switzerland–George Soros is a traitor to his class. That’s not an insult or a tabloid exaggeration. It is, instead, a direct quote from my conversation with the billionaire investor and philanthropist at the World Economic Forum here.

‘‘I am a traitor to my class,’’ Soros said. ‘‘I think that the income differentials are too wide and ought to be narrowed,’’ he added, which is why he favors a bigger hit on those, like himself, at the very top.

But among his plutocratic peers, he said, that is very much a minority opinion. In fact, Soros, who helped spearhead the muscular Wall Street support for Barack Obama in the 2008 presidential election, particularly among hedge fund and private equity investors, believes the president’s call for higher taxes is the reason he has been ditched by the financiers: ‘‘That has led my hedge fund community to abandon Obama in favor of any Republican, because they don’t like to be taxed.’’

George Soros on Europe’s future

Chrystia Freeland
Jan 26, 2012 17:44 UTC

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.

George Soros: I’m a “traitor to my class”

Chrystia Freeland
Jan 25, 2012 21:21 UTC

Watch as the billionaire investor tells Chrystia why the hedge fund community has abandoned President Obama and why there’s not a huge gap between the views of the president and Republican front-runner Mitt Romney.

George Soros’ advice for the euro zone

Chrystia Freeland
Nov 11, 2011 00:18 UTC

Europeans could use a little cheering up this week. One man who is trying to do that is George Soros. He knows his way around a currency crisis, of course, and he isn’t usually accused of being a Pollyanna. Soros thinks it is not too late to save Europe and the euro — but he warns that time is running out and that Europe’s leaders must fundamentally change their strategy to succeed.

Let’s start with the bad news. “Right now, the crisis has hit a new high, because there’s an unresolved government crisis in Greece and in Italy,” Soros said. “There is also a looming worsening of the financial crisis, because all the efforts to leverage the E.F.S.F. have run into legal or technical difficulties.” He was referring to the European Financial Stability Facility, the bailout fund for the euro zone.

“That means that currently Europe has no ring fence against a possible Greek default, and that is what is pushing the market into a renewed panic,” he said. “I expect the market to fall into despair and panic and I expect that to get worse.”

Hungary’s revolution and the Arab Spring

Chrystia Freeland
Jun 17, 2011 16:18 UTC

BUDAPEST – Sometimes the conventional wisdom is right. The Arab Spring really is the most important political event since the 1989 revolutions in Eastern Europe. So it makes sense to find out what the East Europeans make of the uprisings in the Middle East and North Africa and to ask what they think it will take to transform the promise of these rebellions into a lasting political transformation.

A good place to look for those answers this week was Budapest, where Central European University, one of the intellectual centers of the region’s political and economic transition, is celebrating its 20th anniversary.

The scholars and activists who gathered here to toast those two decades strolled along the sunny banks of the Danube, listened to a special concert of Liszt and Mahler — and spent a lot of time debating the lessons of their revolution for the Arab Spring.

The U.S. capitalist love affair with Communist China

Chrystia Freeland
Apr 29, 2011 15:30 UTC

The American blogosphere lit up this week with discussion of a report from the International Monetary Fund that, by some measures, the Chinese economy will be bigger than the U.S. economy by 2016.

It makes a great headline, but that story was, of course, old news: Given China’s size, and the speed with which it is growing, simple arithmetic tells you that its economy will one day be bigger than that of the United States. The only question is when.

The bigger surprise is the huge affection U.S. capitalists have for Communist China.

‘We can’t say they didn’t warn us’

Chrystia Freeland
Nov 29, 2010 17:54 UTC

Chrystia wrote an essay for Foreign Policy’s Top 100 Global Thinkers Issue on the economists and financiers whose ideas survived the financial crisis:

In a letter to shareholders written just after the dot-com bust, Warren Buffett observed, “You only find out who is swimming naked when the tide goes out.” The 2008 financial crisis had a similar effect on our economic and financial gurus: It revealed whose thinking was based on whiggish, End-of-History assumptions about the essential triumph of Western democratic capitalism and whose mental framework admitted the possibility of radical disruption. The thinkers whose intellectual — and maybe even psychological — starting point was that Western market democracy is neither perfect nor eternal turned out to be much better at foreshadowing the financial crisis, and it is those thinkers whose ideas are the most relevant today, in the uncertain, post-crisis world.

These specialists in uncertainty are a broad church: They range from academic economists who saw the crisis coming, like New York University’s Nouriel Roubini and the University of Chicago’s Raghuram Rajan, to philosophers of finance like George Soros and Mohamed El-Erian, who have made huge market bets, as well as intellectual ones, on how bubbles are formed and how they burst. One striking similarity between many of them is that they have seen regime change up close.

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