Soros: Euro on Verge of Major Collapse

'Inevitable' a country will leave euro, he warns
By Mark Russell,  Newser Staff
Posted Jun 27, 2011 4:02 AM CDT
Chairman of Soros Fund Management, USA, George Soros, called for core changes to the euro zone at a conference in Vienna yesterday.   (AP Photo/Michel Euler)

(Newser) – Billionaire investor George Soros had harsh words for the euro zone yesterday, saying it had "fundamental flaws," "no plan B," and that the system is "on the verge of an economic collapse," reports Reuters. The core flaw, says Soros, is that the euro is not backed by a political union or joint treasury, so when something goes wrong with a participating country, there is "no provision for correction," he said. "There was no arrangement for any country leaving the euro, which in the current circumstances is probably inevitable."

Despite Soros' warnings, China continues to support the euro, said Premier Wen Jiabao during a visit to the region. “In recent years we have increased by quite a big margin our holdings of government bonds," said Wen. "We will consistently continue to support Europe and the euro.” Because Europe is China's biggest export market, China needs a strong Europe for its own economy.

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