“If the EU is not able to consider it now, it may not be able to overcome the challenges it is currently facing,” Soros was quoted as saying by Reuters. “This is not a theoretical possibility, it could be a tragic reality“, he emphasizes.
According to the investor, the issuance of bonds to support the parties will require Brussels to maintain a credit rating of AAA, which means the need to allow new taxes to cover the cost of the bonds. “Taxes should only be allowed, they should not be applied“.
Soros commented and the topic you discussed last week – the decision of the Constitutional Court of Germany that the European Central Bank has exceeded its mandate with the purchase of government debt within its quantitative relief program (printing cash). A German court has issued a three-month ultimatum to the bank to justify the proportionality of bond purchases, and warned that the Bundesbank would drop out of the program if no solution was found. In an unprecedented response The European Commission has threatened to sue Berlin.
In his speech on Friday Soros explain that “the easing of state aid rules in Germany’s favor is particularly unfair to Italy, which was already a sick man in Europe and was then hardest hit by COVID-19 “.
Asked about Brexit, Soros explained that he is worried about Italy, if he drops out of the EU, this could be the beginning of the end for the bloc.. “What would be left of Europe without Italy?” He asks.
Soros is not alone in his concerns about the EU’s poor performance in the face of the coronavirus crisis. Last week, Bloomberg reported that Brussels’ failure to “build joint fiscal protection“against the coronavirus and”the lack of a coherent fiscal policy“already turned the euro into one of the weakest major Western currencies, provoking real fears about the future of the bloc.