Bailout deal unjust to you, Soros tells Irish taxpayers
Billionaire investor says bondholders must share the burden of our banking crisis
Published 28/01/2011 | 05:00
BILLIONAIRE investor George Soros said it would be "unjust" if Irish citizens are forced to absorb the cost of the banking crisis without losses to bondholders.
French President Nicolas Sarkozy, also speaking at the World Economic Forum in the Swiss ski resort of Davos yesterday, promised that he and German Chancellor Angela Merkel "will never let the euro down", comments that led the single currency to rally against the dollar.
Mr Soros said Ireland's debts were part of an "unresolved problem" that cannot wait. "You can't wait until 2013 to start restructuring the debt. Ireland is putting Europe on notice that they will want to renegotiate the settlement that the current government did."
Fine Gael leader Enda Kenny and finance spokesman Michael Noonan are due to meet European Commission President Jose Manuel Barroso today to discuss the €85bn bailout.
European Union leaders have agreed that some deal can be done in two or three years, but most observers expect them to agree changes to the EU's bailout mechanisms at a meeting in March. Mr Sarkozy said he and Chancellor Merkel will make new proposals on how to protect the single currency "in the coming weeks".
"The euro is not just a monetary question for us, it's a question of identity" that helps maintain peace in Europe, he said. The single currency rose to $1.3757 from $1.3713 after the speech. Earlier, Hungarian-American financier George Soros criticised the Government's policy of repaying bond holders who lent to the banks.
"It's patently unjust that the Irish people should absorb all the losses made by the banks and that the bondholders should be totally free, and that I think will have to be modified," Mr Soros said. "Greece in due course, maybe sooner rather than later, will also have to be restructured. Portugal also probably needs it."
A restructuring of debts "can be absorbed" the American financier added. "It will cause losses, and if there are any losses then this emergency fund should be able to provide equity to replace missing equity in the banks," he added, in a reference to the €440bn fund that may or may not be increased by EU leaders at a meeting in March.
Mr Soros, a long-term opponent of the euro, blamed the currency for many of the continent's problems but added that "the euro is here to stay" because "there's a commitment for it to be here".
Those views were reinforced by Mr Sarkozy's speech, which saw the French president warn investors not to bet against the euro. "To those who want to bet against the euro, watch your money, because we are fully committed to defend the euro in a structural way," he said. (©Bloomberg)