Soros: Austerity fomenting Europe tensions
http://www.marketwatch.com/story/soros-austerity-fomenting-europe-tensions-2012-01-25
DAVOS, Switzerland (MarketWatch) Billionaire investor George Soros warned on Wednesday that the austerity Germany wants to impose on other euro-zone nations will push Europe into a deflationary debt spiral.
Germans have been traumatized by inflation and they dont understand the threat that deflation can cause, Soros told reporters at the annual meeting of the World Economic Forum in Davos. Theres a shift in German thinking recognizing this isnt working, but were quite far yet from abandoning this emphasis on inflation as the only threat to stability.
The euro zones sovereign-debt crisis is a major topic this year, with German Chancellor Angela Merkel due to give the opening address this evening and European Central Bank President Mario Draghi set to speak later in the week.
Investors are closely watching talks between debt-laden Greece and private-sector creditors in which the two sides are trying to agree on a writedown of Greek debt that will be voluntary.