Soros: euro zone crisis could be ‘a lot worse than the Lehman Brothers’

Billionaire George Soros assured he believes that the current crisis of the euro zone has the ‘potential to be a lot worse than the Lehman Brothers’ in the US due to the lack of consensus in the European Union to create an authority with enough power to handle this problem.

“That is why the problem is so serious. You need a crisis to create the political will for Europe to create such an authority, but there is still no understanding as to what the authority will do,” he said in an interview published by The New York Times.

The billionaire’s statements increased the fear that the debts of countries such as Greece, Spain and Italy could lead to a domino effect of panic spreading the banks of the US and the rest of the world.

According to the newspaper, the US financial institutions are “increasingly wary of making new short-term loans in some cases and are pulling back from doing business with their European counterparts,” a similar situation to the one suffered in 2008 with Lehman Brothers that led to a global recession.

Nevertheless, other experts insist that there is still enough liquidity in the markets due to the capital of the central banks, the European companies’ debt is not as high as the ones of the US three years ago.