Jubilation: Soros Says Greek Debt Must Be Written Off

From Der Spiegel: 

Interview With George Soros: 'Greece Can Never Pay Back Its Debt'

Should Greece have a large part of its debt waived? Absolutely, says George Soros, otherwise the country will never recover. The billionaire investor also warns about the rise of extremist parties if Germany does not change its policies towards Europe.

Legendary US investor George Soros has called for comprehensive debt relief for Greece. "Everyone knows that it can never pay back its debt," he said in an interview with SPIEGEL ONLINE. Greece is close to a primary budget surplus after a lot of pain and suffering, says Soros, whose speculation against the pound forced the UK to withdraw from the Exchange Rate Mechanism in 1992.

"If the official sector could forgo repayment as long as Greece meets the conditions imposed by the troika [of the International Monetary Fund (IMF), European Central Bank (ECB) and European Commission]," Soros added, "private capital would return and Greece could rapidly recover. I can testify from personal experience that investors would flock to Greece once the debt overhang is removed." 

Greek Prime Minister Antonis Samaras has also recently called for a new round of debt relief for his country. "What is important to me is not to procrastinate too much for a solution," he said. But the German government in particular rejects a writedown of Greek government debt. At most, it wants to discuss lower interest rates and longer loan maturities -- measures that many economists do not regard as being sufficient to solve the problems.

In addition, the German head of the European Stability Mechanism (ESM) permanent bailout fund, Klaus Regling, pointed out that debt write-downs are prohibited under ESM rules. The majority of Greece's debt is now held by public institutions, i.e. the IMF, the ECB and other EU member states. If these debts have to be written off, the cost wil be met by taxypayers....MORE

 

You have my word as a hedge fund manager....

HT: MoneyBeat