Soros: Germany's Bundesbank exacerbating crisis

George Soros has said Germany's central bank must recognise its policies may be increasing the threat of a deflationary debt trap in the eurozone.

Writing in the FT, Soros said the sovereign debt crisis has entered what could be a "less volatile but more lethal phase" and called on policymakers to stop defending an unworkable status quo. Soros said the Bundesbank's steps to guard against eurozone break-up are creating a self-fulfilling prophecy whereby "everybody will have to do the same", and also warned against the tightening of credit in Germany itself. "This would be the right policy if Germany was a freestanding country, but the eurozone's heavily indebted members badly need stronger demand from Germany to avoid recession. ...