George Soros: The global financial system is in a ‘self-reinforcing process of disintegration’

December 2, 2011 – LONDON – Investor George Soros foretold doom in a recent speech in front of the International Senior Lawyers Project, according to the WSJ. The financial system is collapsing, and the developed world is fast falling into a “deflationary debt trap.” “The consequences could be quite disastrous,” he said. “You have to do what you can to stop it developing in that direction.” Soros has been an outspoken advocate of taking more radical action to stem the European debt crisis, endorsing intervention by the European Central Bank and even Eurobonds. He doesn’t think too highly about the rest of the world either, speculating that global economic imbalances are continuing to destabilize the global economy. But it’s not all bad. “A lot of positive things are happening,” Soros said. “I see Africa together with the Arab Spring as areas of progress. The Arab Spring was a revolutionary development.” –Business Insider

Words of warning from French President: Toulon, France – French President Nicolas Sarkozy said Thursday that using austerity alone to solve the economic crisis afflicting France and the rest of Europe would lead to recession and possibly even depression. He said such an approach would make the French people pay nearly the whole cost of trying to recover from the crisis. “It would end in recession or depression,” Sarkozy said in a speech in the southern French city of Toulon. Sarkozy said that cuts and economic reform were necessary but were only part of what were needed to help Europe emerge from its sovereign debt crisis. –Market Watch

No quick fixes: German Chancellor Angela Merkel flatly rejected any quick-fix ideas to try to resolve the European financial crisis, telling lawmakers Friday that treaty changes and a stricter fiscal union were the only path forward – a process could take years. Merkel and French President Nicolas Sarkozy are pushing for a reorganization of existing European Union regulations, in order to ensure the Eurozone’s long-term stability and win back the trust of markets that have grown jittery over what they view as European dithering. She also rejected an idea floated this week, of taking advantage of a clause in the EU’s constitution to allow the Eurozone nations to enact their own treaties for governing the currency, underlining that any treaty changes must include 27 member states. “We are going to Brussels with the goal of pushing through treaty changes, in order to avoid a spirit of division between the Eurozone and non-eurozone members,” Merkel said. On Thursday, Sarkozy called for a “refounding and rethinking the organization of Europe.” He said that without some new “convergence” among European countries, the continent’s crushing debt could destroy the euro. Merkel and Sarkozy are to meet Monday to finalize their joint strategy ahead of next week’s EU summit. –My Way 

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