Soros predicts weaker nations will leave euro

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The Independent Online

George Soros, the man who made more than $1bn by betting against sterling on Black Wednesday in 1992, predicted yesterday that weaker nations would have to leave the euro.

Mr Soros said it was "probably inevitable" that highly indebted economies would be given a way to quit the single currency.

"We are on the verge of an economic collapse which starts, let's say, in Greece but it could easily spread," the 80-year-old investor said. "The financial system remains extremely vulnerable."

European leaders are trying to avoid Greece defaulting on its debt – which could have a knock-on effect for Portugal, Ireland and Spain and threaten the euro's existence. Fears pushed the euro to a record low against the Swiss franc last week.

Mr Soros said the euro was at the centre of Europe's crisis. "It's a kind of crisis that is really developing. It's foreseen. Most people realise it," he told a panel discussion on risks to liberal democracy in Europe, reported by Bloomberg.

"It's still developing. The authorities are actually engaged in buying time and yet time is working against them."

Mr Soros achieved fame and lasting influence in September 1992 when he bet that sterling would not remain in the European Exchange Rate Mechanism at its agreed level.

On Black Wednesday the Conservative government was forced to pull sterling out of the ERM, which was the precursor to the euro, at a cost to the country of £3.4bn.