Soros warns Greek default 'inevitable'

Billionaire investor George Soros has warned a Greek default is “inevitable”, and EU leaders must adopt a plan B to stem contagion to the rest of Europe.

Writing in the Financial Times, the founder of the Quantum hedge fund said the authorities should implement the wider use of Eurobonds as a way of protecting other countries in the eurozone. 

"Greece is heading towards disorderly default and/or devaluation ... A Greek default may be inevitable but it need not be disorderly," he wrote in an editorial for the paper.

"While some contagion ... will be unavoidable, the rest of the eurozone needs to be ringfenced. That means strengthening the eurozone, probably by wider use of Eurobonds and a eurozone deposit insurance scheme," he said.

He also reiterated his call for European policymakers to come up with a "plan B" to muster the political support needed to take such measures and said Europe's elite had to "revert to the principles that guided the union's creation."

Soros, famous for making $1bn by betting against sterling in 1992, said in June it was "probably inevitable" a country would exit the euro, but did not specify which country, Reuters reports.

Eurozone finance ministers met in Brussels yesterday to find a way to help Greece and limit contagion to the rest of the region, but did not rule out the possibility of a default.