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Simon Dawson/Bloomberg

Soros predicts '25 year slump' in Europe without action

Investor warns of Japanese-style economic slowdown on the horizon.

BILLIONAIRE INVESTOR GEORGE Soros said Europe faces 25 years of Japanese-style stagnation unless politicians pursue further integration of the currency bloc and change policies that have discouraged banks from lending.

While the immediate financial crisis that has plagued Europe since 2010 “is over,” it still faces a political crisis that has divided the region between creditor and debtor nations, Soros, 83, said in a Bloomberg Television interview in London today. At the same time, banks have been encouraged to pass stress tests, rather than boost the economy by providing capital to businesses, he said.

Europe “may not survive 25 years of stagnation,” Soros said in the interview with Francine Lacqua. “You have to go further with the integration. You have to solve the banking problem, because Europe is lagging behind the rest of the world in sorting out its banks.”

Soros, whose hedge-fund firm gained about 20 percent a year on average from 1969 to 2011, has been a constant critic of how the European currency bloc was designed and of budget cuts imposed on indebted nations such as Greece and Spain at the height of the crisis. He said more “radical” policies are required to avoid a “long period” of stagnation.

Yields Falling

Investors have concluded that Europe’s debt crisis has waned, with the average yield-to-maturity on bonds from Greece, Ireland, Italy, Portugal and Spain falling to 2.4 percent yesterday, the lowest in the history of the euro area, according to Bank of America Merrill Lynch indexes. That’s down from more than 9.5 percent in 2011, when the region was rocked by concern that nations would struggle to service their debt, risking a breakup of the currency bloc.

European bank shares are “very depressed,” making it an “attractive time” to invest, Soros said. Still, he said it is going to be a “very tough year” for lenders as they try to shrink balance sheets and boost their capital to pass the European Central Bank’s stress tests, he said.

The 43-member Bloomberg Europe Banks and Financial Services Index trades at a 0.2 percent discount to book value, while the KBW Bank Index, which tracks 24 U.S. lenders, trades at a 14 percent premium, data compiled by Bloomberg show.

The ECB will analyze lenders this year to determine whether they could survive an economic crisis. ECB Chairman Mario Draghi has said he’s determined to convince investors that the health check is thorough and credible.

Ukraine Crisis

Soros Fund Management LLC, the hedge-fund firm that Soros turned into a New York-based family office three years ago to manage only his personal wealth, made $5.5 billion of investment gains in 2013, according to LCH Investments NV. The profits were more than any hedge-fund manager, according to LCH, a firm overseen by the Edmond de Rothschild Group that invests in hedge funds.

Soros also said Ukraine should serve as a “wake-up call” for Europe, because the political turmoil the country now faces stems in part from the same problems that triggered the region’s financial crisis.

The European Union required “too much” of Ukraine and offered “too little” as the country attempted to join the political bloc, he said. That enabled Russian President Vladimir Putin to fill the void and gain power in Ukraine, he said.

“Europe needs to rediscover its own European identity — instead of each country just pursuing its own national interests and getting further into conflict with the others,” Soros said. “I hope Europe passes this test” in Ukraine, he said.

Soros, who made $1 billion betting against the U.K. pound in 1992, added that a British referendum on leaving the EU would be “disastrous,” because it would cost the country jobs.
U.K. growth has been fueled by multinational companies selling goods and services to Europe, so it would be “suicidal” if the country left, he said.

- © Bloomberg

Ireland’s economy forecast to grow 1.7 per cent in 2014>

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    Mute Mark Gerard Lochlain
    Favourite Mark Gerard Lochlain
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    Jun 27th 2015, 8:24 AM

    Awww such a pity!!!! I actually only saw the shop for the first time a few weeks back in Powerscourt and thought I’d bring my nieces there someday!!! It looked lovely all the best.

    326
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    Mute Tallaght two
    Favourite Tallaght two
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    Jun 27th 2015, 10:16 AM

    this is more a salient lesson on being careful where you move your business and unfortunately is not a good advert for powerscourt. hopefully they make a go off it online. the demand definitely exists it the location didn’t support them.

    94
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    Mute Mark Fran
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    Jul 5th 2016, 10:23 PM

    Life is all about good and bad experience
    Life is all about good and bad experience. It was all good and lovely when i met jully, she was a good business woman until things become rough for her and her business empire started liquidating. I was a very courageous and hardworking man so i decided to sell my inheritance to assist . We both struggle together and built the business world again. This time around the business was growing from strength to strength. I was surprise one Sunday evening when she came home with her secretary and told me that we cannot continue with this pretense called love. I was shocked and heart broken, i was in a friend, house for three weeks frustrated until i met fernando my old friend at the supermarket, he directed to me to Dr saka. I contacted saka and he told me that Jully was been manipulated by some spiritual power and he told me to provide some items which he is going to use to destroy the evil spirit. I never believe in voodoo but i had to give him a trial. To my greatest surprise, Jully called and started apologizing 2 days after i sent Dr. Saka the email. I am very happy and will continue to be happy for the good work the Saka has done in my life. Problems are been solved when good people like Saka are on this planet, please contact him through ultimatespearcast@gmail.com if you need any support in any problems in life. I love Dr Saka … :)

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    Mute Chauncey Gardiner
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    Jun 27th 2015, 8:39 AM

    Such a shame! You can’t cuddle a smartphone kids!

    249
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    Mute David McShite
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    Jun 27th 2015, 9:15 AM

    It’s so strange. We all read the most terrible of news stories every day, we are seldom surprised or shocked to any great extent as terrible things in the world have become the norm.
    But this little story just came in under the radar and made our inner child shed a tear.
    I hope they find a way to continue.

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    Mute Aaron Burns
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    Jun 27th 2015, 8:26 AM

    This is an awful shame, but I guess in this day and age people would just go out and buy a new doll/ teddy rather than get it repaired.

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    Mute Evelyn Hughes
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    Jun 27th 2015, 11:47 AM

    U can’t buy a new best friend

    46
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    Mute Anya
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    Jun 27th 2015, 9:08 AM

    Have had my teddy since I was born (am 28 now) and he was quite battered so I brought him here. They did a great job at fixing him and I’m eternally grateful, I’d have been devastated to lose my bear. Such a shame they have to close the doors :(

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    Mute Dave
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    Jun 27th 2015, 8:50 AM

    Had my 36 year old teddy fixed there so that my son could have it. They did a great job. Such a shame they’re closing, but that’s the way of the world now. Easier to throw away and buy a new one.

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    Mute Malvolio32
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    Jun 27th 2015, 8:47 AM

    You have to love that sign, wonder is it original, or based on something else?

    61
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    Mute Melissa Porter Nolan
    Favourite Melissa Porter Nolan
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    Jun 27th 2015, 1:34 PM

    Yes it’s original, designed & made by James Hankey, Tallaght, Dublin. It’s stood the test of time. It was out doors for almost 30 years. I still love still.

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    Mute Bobby Connolly
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    Jul 6th 2015, 9:51 PM

    Melissa, Robert and Lu here. Just caught the article on the Journal about the shop closure. So sorry to hear that and we hope the online business goes really well for ye though I guess nothing makes up for the day to day involvement in the shop. Best wishes for the future.

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    Mute Mel Healy
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    Jun 27th 2015, 9:01 AM

    A sad end. Teddybear Varadker should be ashamed of himself.

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    Mute Karen NíDhochartaigh
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    Jun 27th 2015, 9:21 AM

    devastated I only recently discovered the place and wanted to bring in my first ever teddy so I could then pass it to my little girl :’(

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    Mute Alan Lawlor
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    Jun 27th 2015, 10:10 AM

    Those damn HSE budget cuts are hitting everywhere

    44
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    Mute Malvolio32
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    Jun 27th 2015, 9:24 AM

    Am I the only one here who never remembers having a teddy bear, I had a little shovel I brought everywhere?

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    Mute Charlie Mountney
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    Jun 27th 2015, 9:39 AM

    So you didn’t forget your shovel Malvolio?

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    Mute willow
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    Jun 27th 2015, 3:32 PM

    First Clerys and now The Dolls Hospital. Dublin is definitely changing and not for the best. Loved that Dolls hosp…..

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    Mute Alison Sutcliffe
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    Jun 27th 2015, 12:04 PM

    Such a huge part off Dublin history closing. Knowing the hospital was there for my teddies as a child growing up was a big thing for me and for my children now. We have visited the hospital and had teddies restored over the years. Such sad news to hear you are closing. like to thank you for all the care and love you gave to dolls and teddies that where each and every child’s pride and joy and much loved toys over the years.

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    Mute Maximus
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    Jun 27th 2015, 4:17 PM

    This is what should be on Grafton Street (rent free of course

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    Mute SnowCailín
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    Jun 27th 2015, 2:26 PM

    Does any business do well on top floor of shopping centre. This one seems like it could be a really good online business – and could possibly attract custom from abroad. I really hope it tries online as a way to survive – it’s a national treasure for a few generations!

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    Mute Terri O'Gorman McCormick
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    Jun 27th 2015, 4:20 PM

    Where are the dollies and teddys gonna go now. So sad!! Just another little bit of magic gone!!!

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    Mute Melissa Porter Nolan
    Favourite Melissa Porter Nolan
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    Jul 18th 2015, 11:24 AM

    They have all been packed up with lots of TLC & some sadness. I have kept the collection together in the hope someone or some place will have a suitable home to display them again once and for all. Melissa

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    Mute Ciaran De Bhal
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    Jun 27th 2015, 10:55 AM

    I can remember the shop in Mary St. No. 5 or 6 maybe? My Dad had a dancewear shop in No.3. I used to love going in to the dolls hospital on Saturdays.

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    Mute Wyon Stansfeld
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    Jun 27th 2015, 3:11 PM

    Very sorry to hear that Dublin can not even support one decent toy shop, all the best for the future Melissa

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    Mute Michael Sands
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    Jun 27th 2015, 8:06 PM

    Loads of jobs are still going but no one says a word unless the government promises new jobs that are coming years down the road but never arrive…

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