Investors stopped seeing Spain and Greece as secure when German chancellor Angela Merkel said EU countries needed to act independently to guarantee their financial institutions, George Soros said in a speech on Saturday.
Speaking at the Festival of Economics in Trento, Italy, the billionaire investor said the EU itself was a “bubble”, hyped by Germany’s willingness to continually come off second-best to promote the interests of the world.
But when Merkel started speaking as though this would not continue, the markets slowly began to rethink the sovereign debt of member states.
“In my judgment the authorities have a three months window during which they could still correct their mistakes and reverse the current trends,” he said. “By the authorities I mean mainly the German Government and the Bundesbank because in a crisis the creditors are in the driver’s seat and nothing can be done without German support.”
The full speech can be viewed on Soro’s website.