George Soros says coronavirus threatens EU’s survival

The European Union’s survival was threatened by the coronavirus unless it could issue perpetual bonds to help weak members such as Italy, billionaire George Soros said. (AFP)

LONDON: George Soros, the billionaire financier, has cautioned that the European Union’s survival was threatened by the coronavirus unless it could issue perpetual bonds or “consols” to help weak members such as Italy.
“If the EU is unable to consider it now, it may not be able to survive the challenges it currently confronts,” Soros said in a transcript of a question-and-answer session emailed to reporters. “This is not a theoretical possibility; it may be the tragic reality.”
Soros said the EU would have to maintain its AAA credit rating to issue such debt — and thus have to have tax raising powers to cover the cost of the bonds — so suggested it could simply authorize the taxes rather than imposing them.
“There is a solution,” said Soros, who earned fame by betting against the pound in 1992. “The taxes only have to be authorized; they don’t need to be implemented.”
Asked about Brexit, Soros said he was particularly worried about Italy: “What would be left of Europe without Italy?”
“The relaxation of state aid rules, which favor Germany, has been particularly unfair to Italy, which was already the sick man of Europe and then the hardest hit by COVID-19,” Soros said.
Soros used Quantum Fund in 1992 to bet successfully that sterling was overvalued against the Deutsche Mark, forcing then-British Prime Minister John Major to pull the pound out of the European Exchange Rate Mechanism.