Brexit a New Financial Market Crisis – Soros

One of the world’s richest men, George Soros, told the European Union in Brussels that the Britain’s decision to exit the European Union has unleashed a global financial crisis similar to what happened in 2007 and 2008.

“This crisis has been unfolding for a while, but the Britain exit from the EU will catalyze it and most likely to reinforce deflationary pressures that were already prevalent,” Soros was quoted in Brussels.

George Soros who rose to fame after profiting $1billion from the Bank of England in 1992, also warned that the debt-fueled China’s economy is heading for an unavoidable hard landing similar to that of the U.S. at the onset of the financial crisis.

The billionaire investor believes the continental Europe’s banking system is yet to rebound from recession and will now be severally tested. Even though they “know what need to be done, but political and ideological disagreements in the Euro-area stood in the way” of implementing the European Stability Mechanism as a backstop.

Soros had predicted the pound may fall more than 20 percent against the US dollar if Brexit materialized. The pound has since plunged to 31-year low against the US dollar post-Brexit.

The U.K.’s exit meant the “imaginary became real,” Soros said on Thursday. “The pound fell, Scotland threatened secession, and some of the voters who supported the ‘exit’ campaign now realized its consequence on both the country and themselves. Even the champions of Brexit are retracting their dishonesty.”

Soros urged the European Union not to worsen the situation by penalizing British voters, “European leaders need to recognize their own mistakes and take responsibility for democratic deficit of the current institutional arrangements.”

If disaffected voters in Germany, France, Sweden and everywhere else sees the EU benefiting their lives, the EU will emerge stronger and if otherwise, “it will eventually blow apart,” Soros concluded.