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Wednesday, 12 October 2011

Soros warns euro crisis could destroy world financial system

BERLIN (AFP) - Billionaire investor George Soros and some 100 former European dignitaries on Wednesday published an open letter warning that the euro zone debt crisis could bring down the global financial system.

'The euro is far from perfect,' they wrote in German business daily Handelsblatt. 'The current crisis has shown that.'

'But as a reaction to that, we need to revise the weaknesses in its make-up rather than allow the crisis to undermine, even destroy, the world's financial system,' they added.

The group, calling themselves 'concerned Europeans', appealed to governments to establish an institution that can provide liquidity to the whole euro zone, a strengthening of financial market oversight and a revised European Union (EU) growth strategy.

The letter was signed by top former politicians, such as ex-German finance minister Hans Eichel, former French foreign minister Bernard Kouchner and Pedro Solbes, who was once EU Economic and Monetary Affairs Commissioner.

Distinguished economists such as Mr Charles Goodhart from Britain and Mr Peter Bofinger from Germany also added their names to the appeal.

France and Germany have vowed to come up with a wide-ranging solution to the ongoing debt crisis by the end of the month but have kept mum on the details.

The euro zone power-brokers are working on four main issues - pumping more money into European banks; defining the way the European bailout fund should work; supporting the work of international auditors in Greece and toughening the EU's debt rules.

Later on Wednesday, European Commission President Jose Manuel Barroso was poised to issue hotly anticipated proposals on bank recapitalisation, seen as a key step in bolstering their defences against the debt crisis.

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