Soros speaks on Euro

Can European leaders escape from the mess they've got themselves into? It's the first question I was asked by John Humphreys this morning on the Today programme, as part of a lively discussion of the crisis with Martin Wolf, of the Financial Times.

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Media captionStephanie Flanders and the FT's Martin Wolf examine the significance of the outcome of this week's eurozone summit

I happened to draw a comparison with the 1992 ERM (Exchange Rate Mechanism) crisis - that the writing was on the wall, not when politicians run out of things to do, but when they run out of things to do that investors believe they can actually carry out. (That was 15% interest rates in the middle of a recession, in the case of the UK in 1992).

The question was whether eurozone leaders have now reached that point.

As luck would have it, I later found myself interviewing George Soros, the global financier-turned-activist who is still best known in Britain as the man who bet against the pound in the 1992 crisis - and came out the process a great deal richer.

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Media captionGeorge Soros says the European Union has become "ungovernable"

I asked Mr Soros whether this did now feel like a similar crunch-point to 1992. Not to put too fine a point on it - was he selling the Euro? He said no, European governments would find a way to hold the single currency intact, if only because the alternative was too ghastly to contemplate.

You hear the same thing again and again: people insist that the Euro cannot fail, just after explaining why it's going to be so difficult for it to carry on.

So, there was a vote of confidence for the euro, of sorts, from Mr Soros. But the rest of the interview would not make happy listening for President Sarkozy - or Jean- Claude Trichet.

Mr Soros actually compared the Eurozone crisis to the collapse of the USSR - he said both cases had the same air of disintegration. He also said that the "plan", as we understand it, might get the single currency through the next three months, but it would not tackle the underlying problems. Growth was a massive problem. And they were going to have to write off a lot more Greek sovereign debt - not just the bonds held by private investors.

Food for thought. Incidentally, Mr Soros also had some very interesting things to say on my second Stephanomics programnme on BBC Radio 4. We debated who deserves the most blame for the financial crises of the past few years - including the travails of the eurozone: financiers, economists, or politicians?

The other participants in this week's show were Deanne Julius, Chairman of Chatham House and Sir Howard Davies, the former Director of the FSA and a former deputy governor of the Bank of England.

Fascinating discussion of how we got into this mess - and whether the right lessons had any chance of being learned. You'll not be surprised to hear, there was plenty of blame to go around.