NEW YORK (MarketWatch) ó The European Union has three months to address its financial crisis before the markets stop giving it time, but in the end the euro is likely to remain, said George Soros, chairman of Soros Fund Management LLC.
Europe is struggling with a fundamental flaw of its original design: thatís itís a monetary and economic union but not a political or fiscal one, Soros said at the Festival of Economics in Trento, Italy, according to remarks posted Sunday on Sorosís website.
The solution will require European deposit insurance to stem the outflows of deposits already being seen from peripheral countriesí banks, he said. It will also require allowing banks to access direct financing from the European Stability Mechanism ó the regionís permanent bailout mechanism which currently is designed to be tapped by sovereign
That will need to go hand-in-hand with euro zone-wide supervision and regulation, he said.