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Wiener Zeitung - Austria | Thursday, September 20, 2012

For George Soros Germany can leave the Eurozone

Germany can leave the euro crisis if it wants to solve the euro crisis, the US investor George Soros writes in the state-run liberal daily Wiener Zeitung: "In my judgment the best course of action is to persuade Germany to choose between becoming a more benevolent hegemon, or leading nation, or leaving the euro. ... If Germany left, the euro would depreciate. The debt burden would remain the same in nominal terms but diminish in real terms. The debtor countries would regain their competitiveness because their exports would become cheaper and their imports more expensive. ... The creditor countries, by contrast, would incur losses on their investments in the euro area ... therefore creditor countries would have an interest in keeping the depreciation within bounds. The eventual outcome would fulfill John Maynard Keynes's dream of an international currency system in which both creditors and debtors share responsibility for maintaining stability. ... It may come as a surprise, but the eurozone, even without Germany, would score better on standard indicators of fiscal solvency than Britain, Japan, or the US. A German exit would be a disruptive but manageable onetime event, instead of the chaotic and protracted domino effect of one debtor country after another being forced out of the euro by speculation and capital flight."

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