Euro crisis 'about to be resolved': Soros

4th February 2011, Comments 0 comments

The euro crisis is about to be resolved because eurozone members are working towards aligning their fiscal policies, but Europe is still "flawed," financier George Soros said Friday.

The euro crisis "is about to be resolved. There is now a determination to make up the missing element, which is a common fiscal policy or a common treasury," Soros told the Munich Security Conference in Germany.

"But I'm afraid that the structure that is being put together will also be flawed," he added.

"It is clearly visible that it will create problems in the years to come because the euro, which was supposed to bring about convergence has actually created a divergence within the performances of the various countries.

"The structure that is currently being discussed will cast this divergence in stone. That will have very serious consequences because you are creating a two-speed Europe between surplus countries surging ahead and indebted countries sinking under the weight of their debt."

His comments came as Germany and France pushed at an EU summit for a pact aimed at closer fiscal and economic policy in order to prevent another crisis of the kind that saw Greece and Ireland need to be rescued last year.

Soros also warned of a looming crisis in the United States because of the heavy debt levels of states and local governments.

"In the coming two years you will see something of a replay of the euro crisis in the United States in connection with the states and local governments," he said.

© 2011 AFP

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