Posts in Category: Global Economic Slowdown

George Soros Asserts That Ukraine Merits Debt Relief

George Soros decries the Russian aggression because it has taken a toll on new Ukraine’s economy. To this end, George proposes for financial support to Ukraine. In the recent past, Ukraine was struggling to reach a deal with its creditors. This is because the International Monetary Fund demanded for the negotiation as a condition to provide Ukraine with financial support. The renegotiation regarding the country’s debt was deliberated in San Francisco.

Soros posits that the country lacks a chapter 11 where sovereign borrowers may establish a deal between borrowers and lenders. In addition, Ukraine does have latitude on the types of debts to be reorganized. In addition, the country cannot mediate deliberations between the lenders and borrowers. This situation leaves Ukraine to negotiate with the private lenders. The greatest disadvantage of this setting is that the side having might makes the decision. George Soros Ukraine posits that in this situation, Ukraine can only leverage on default unless debt relief is provided. On the other hand, bondholders must be telling Ukraine that if she defaults, people will not invest in the country for a long time.

Soros contends that defaulting on sovereign debt is costly for any nation. However, when the lenders can reach a speedy agreement with a given country, such a country is able to return to the market within a year or two. Soros argues that a country is not kept out of the international market for defaulting but instead for the economic issues that resulted in the default. A former secretary to the U.S. treasury, Nicholas Brady, came up with the Brady Plan in 1989. The plan sought to urge the banks to recognize and accept debt relief. During the time, the plan was designed to aid Latin American countries in pursuit of sensible reforms get debt relief.

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George Soros – Project Syndicate

The Greatest Investors: George Soros

Today, Ukraine is working on enhancing the structural reforms proposed under the Brady Plan. These reforms comprise of dealing with corruption, ensuring that the judicial system is reformed and making the country independent from Russian gas. The other reforms are synchronizing the Ukrainian economy with that of the European Union, augmenting agriculture and reforming the banking sector.

George Soros serves as the chairman of the Soros Fund Management. He is also the chairman of the Open Society Foundations. He is a pioneer of hedge-fund business. Over the years, Soros has authored many books. In a recent article, Soros posited that Ukraine’s presidential elections and elections undertaken in the European Parliament produced different outcomes. In Europe, voters were dissatisfied with European Union’s functions. In Ukraine, the populace exhibited their wish to be associated with the EU. Soros believes that citizens and leaders in European should view the two outcomes and devise ways through which Ukraine can be of help to Europe.

Before the euro crisis, the EU enhanced the relationship between sovereign states. However, this situation changed with the emergence of the euro crisis. This is because the relationship in EU is based on creditor and debtor relationships. The creditor countries exercise their dominance over the debtors.

Learn more about George Soros:

Inspiring Lessons from George Soros 2008 Prediction

Global markets are at risk and billionaire George Soros has warmed investors to be cautious. With China literally struggling to achieve a new growth form; the devaluation of its currency is being felt across the globe. Speaking in Colombo, Mr. Soros has noted that return to positive interests remain to be a challenge for the developing nations.

Currently, the world currency, commodity and stock markets have been struggling from the first week of 2016. The fact that the Yuan is also sinking has not made things any easier, and this has added to the current concerns about the solidity of China’s economy even as it shifts from manufacturing and investment to services and consumption.

George Soros regrets that China has a huge adjustment problem which he believe amounts to an even major problem. Soros further notes that as he observes the financial markets, he sees a major challenge which he also believes is reminiscent of 2008. In 2008, Soros warned of a similar calamity. In 2011, September while facing a panel, he warned that the Greece born European debt crunch was worse than what was experienced back in 2008.

However, the Communist Party in China has made a pledge to increase the exchangeability of the Yuan by 2020 and dismantle the capital controls gradually. China is the World’s second largest economy, but it continues to encounter this problem. This is amidst a huge cut on interest rates by the People’s Bank of China. The bank has cut interest rates to a record low and authorities have put in billions worth of dollars to try and save the economy from an eminent death. Most data this week has put emphasis on a slow manufacturing industry.

George Soros is an accomplished entrepreneur and the founder of the largely successful Soros Fund Management, and among the most renowned global philanthropists. Soros was born in Hungary and migrated to England as a boy where he witnessed the Nazi occupation of his birth country. His achievements were shaped by his childhood experiences and largely informed his political views.

He is a graduate of the London School of Economics and a staunch student of Karl Popper a renowned philosopher. Upon graduation, Soros relocated to New York where he started his finance career although being employed gave him little gratification leading to the formation of his company Soros Fund Management. Today, it is one of the world’s most profitable hedge fund firms.

Through short selling, he made a total profit of one billion US dollars during the Black Wednesday in the UK in 1992. He actively become involved in charitable activities in the 1970s and is the founder of the Open Society Foundation which promotes political causes, social and economic reforms.