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FAREED ZAKARIA GPS

Putin's Columns; Syria Under Siege; Interview With George Soros

Aired February 12, 2012 - 10:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


FAREED ZAKARIA, HOST: This is GPS, THE GLOBAL PUBLIC SQUARE. Welcome to all of you in the United States and around the world. I'm Fareed Zakaria.

We have an important show for you this week starting in Syria. President Bashar al-Assad's brutality continues unabated, so given the failure of the U.N. Security Council to act, what can be done? What should be done to stop the violence? Will it end? We'll talk to scholars, experts, policymakers.

Later in the show, an exclusive interview with the great financier George Soros on why he foresees European problems and what he thinks of the United States economy.

Also, "What in the World?" Mitt Romney got me thinking about America's very poor. I'll show you the results.

Finally, what the dickens was going on in the British government this week? I'll explain.

But first, here's my take. If you're trying to understand the recent protests against the Putin regime in Russia, one of the best guides is an outspoken columnist who's been writing trenchant essays in the nation's leading newspapers over the past month.

"Political competition is the heartbeat of democracy," this author writes, noting the absence of such competition in contemporary Russia. He describes the frustrations of the Russian middle class, demanding political rights.

"Today, the quality of our state does not match civil society's readiness to participate in it." On corruption, perhaps the issue that most riles the public, the author is scathing. "The problem comes from the lack of transparency and accountability of government," he says.

Now, what makes this all deeply strange is that the author of these essays is Vladimir Putin - the architect, builder, and chief enforcer of the system that he is critiquing. Putin seems to understand Russia's problems better than your average dictator. He doesn't seem to understand that he is the source of those problems in many people's eyes.

In Putin's worldview, he is the savior of modern Russia, the man who stopped its descent into chaos and poverty in the 1990s. His opponents see him as a warmed over KGB apparatchik, presiding over a new, improved Soviet state.

Neither view is entirely accurate. The real hero of Russia's rescue was oil. The dramatic rise in the average Russian's income has been a consequence not of Putin's policies but of oil prices. The price of oil when Putin came to office was $27 a barrel. From that point, it began an almost unbroken rise and is now at $116 a barrel. And oil is the lifeblood of Russia's economy. It provides two-thirds of its exports, half of the federal government's revenues.

The Russian state has used these revenues to dole out patronage across the country. It is widely believed in the West that Putin stays in power through repression. Actually, he does so in larger measure through bribery.

In the short run, Putin will be able to win the March election and consolidate power through a mixture of repression and patronage. His problems are more long-term. His government has ramped up its revenues to the point that it now needs oil to approach $125 a barrel simply to balance the budget.

Russia's demographics are terrible. It has a population that's aging and shrinking, which means pension and health care costs will rise as people retire, labor productivity in Russia is abysmal, the Caucuses region is almost turning into a separate country, and Russia's ethnic diversity is straining its sense of nationalism. But, like Saudi Arabia, like Iran, like Venezuela, all somewhat dysfunctional regimes, the Russian regime will survive these challenges until and unless oil prices come down.

For more on this, you can read my column in this week's "Time" magazine.

Let's get started.

(BEGIN VIDEOTAPE)

ZAKARIA: The violence in Syria escalated this week. Hundreds and hundreds of civilians have been killed. The question is, in light of Russia and China's veto of a U.N. Security Council resolution to condemn and try to stem the violence, what options are left for the international community to act on?

To talk about this, three great guests. Fawaz Gerges joins me from London. He is the director of the Middle East Study Center of the London School of Economics.

Elliott Abrams was the Deputy National Security Advisor for President George W. Bush. He lives in D.C.

And in Beirut, Rami Khouri runs the International Affairs Program at the American University there.

Fawaz, let me begin with you. How would you describe what is going on in Syria? Because it appears to be more than just a few protests. There seems to be a kind of incipient civil war.

FAWAZ GERGES, PROFESSOR, LONDON SCHOOL OF ECONOMICS: Well, I think Syria has already descended into a prolonged conflict. Political violence has spread to many parts of Syria. Many Syrians - I have just returned from the area - many Syrians are arming themselves. The Syrian government appears to be losing control of some neighborhoods and some streets and even towns.

You have now a potent armed insurgency. The Assad regime in the last one week or so has launched an all-out offensive to crush the insurgency. The Security Council has been neutralized as a result of the double veto. The Syrian crisis has been caught in the unfolding cold war between the Saudi-led alliance and the Iranian coalition.

This is a very, very prolonged conflict. Even though I don't see how Assad can survive on the long-term, it will take a miracle to rescue his sinking ship. In the short-term and the medium term, Assad is not as desperate as some of us or most of us would portray him to be.

ZAKARIA: Rami, Fawaz talked about a Saudi-Iranian a cold war where Syria is, in a sense, the battleground.

Do you - from the - in the region, does it appear to you that way, that you have on the one hand the Syrian regime backed by Iran, really its sole major ally, but then is there - is there a lot of money and arms flowing in from Saudi Arabia?

RAMI KHOURI, AMERICAN UNIVERSITY OF BEIRUT: Well, there are three things happening simultaneously. You do have the Saudi and Iranian-led cold war in the region that's been going on for some years and has played itself out in Lebanon and Palestine and Iraq, sometimes in Somalia and Yemen and now in Syria.

And you have the second thing, which is this Arab - series of uprisings all across the region where citizens are trying to reclaim their dignity, their sovereignty, and their citizenship, and their rights.

And the third thing now, which is the most recent, with the veto at the United Nations you have the Russians, the Chinese as two world powers that are reclaiming a role in the region as the Americans and the Europeans slowly lower their footprint in the region. And, simultaneously, the rise of regional powers like Turkey, Iran, Saudi Arabia, and the Arab League now is the latest player, Qatar to a certain extent, and the Egyptians are on their way.

So you have three things happening simultaneously, and all of them are converging on Syria.

ZAKARIA: Elliott, if you were in the National Security Council right now, trying to figure out whether this regime could survive, wouldn't one of the key metrics be whether there are defections in the army, whether the regime itself is cracking? And what I'm struck by is for all this - all the turmoil, you don't see much in the way of defections of the army or the intelligence. ELLIOTT ABRAMS, SENIOR FELLOW, COUNCIL ON FOREIGN RELATIONS: Well, I think that's right. I would say that that's because people have not yet become convinced, people in the army, that Assad is definitely going to lose and going to lose reasonably soon.

So I think the message there is that we, on our side of the axis, we with the Turks, we with the Saudis, need to be doing more to help the side that is being killed by the Assad regime and its supporters - Iran, China, Russia.

ZAKARIA: Fawaz, would you agree with that, that the - that the intelligence and army are not convinced that Assad is going down, that's why they're clinging to him? That it would be possible to pry them away?

GERGES: Fareed, you and I, we talked six months ago when I was in Syria. I don't know if you remember. And I made the point that it's not just about the security apparatus. The reason why I think this particular regime has a lot of staying power for several reasons.

First, it has a critical base of support, social support, Fareed. Millions of Syrians, sadly to say, not just Alawites. The Christians I talked to Fareed, they're more fanatical, pro-Assad than the Alawites. You have the bourgeoisie class, the merchant class that has benefited from the neo-liberal policies of the Assad regime. So a critical base of support.

You have the security apparatus that has remained solidly behind him. And when I say a solid security base, Fareed, I'm talking about 300,000 troops and soldiers. Assad can mobilize up to 500,000 special forces and has - he has been doing so.

And, not only that, of course, he has the support of Iran. Iran - I mean, what we need to understand, Fareed, is that the Iraq - the Tehran-Baghdad road now has become the lifeline of the Assad regime in terms of money, in terms of arms, so he has the veto - two double vetoes in the last 10 months. And that's why I think we need to have some humility, and we have to be blunt with the position.

Yes, Assad might not survive, will not survive on the long-term. But this is going to be a very deeply entrenched, very bloody, very costly, very prolonged conflict, indeed.

ZAKARIA: We're going to have to take a break. When we come back, I'm going to ask Elliott Abrams what he would do about the Russian and Chinese vetoes. And we're also going to talk about Iran, which is Syria's main sponsor, when we come back.

(END VIDEOTAPE)

(BEGIN VIDEO CLIP)

ABRAMS: We should not watch that happen and sit by. We should give them help, concrete help.

ZAKARIA: Fawaz, would that expand this insipient civil war? GERGES: It's terrible advice, Fareed.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

(BEGIN VIDEOTAPE)

ZAKARIA: And we are back with Fawaz Gerges from London, Rami Khouri from Beirut, and Elliott Abrams from Washington, discussing Syria and all the turmoil going on there.

Elliott, when you confront a double veto from the Russians and Chinese, which effectively means the U.N. Security Council is not going to be able to authorize these actions, which we - you know, which we all understand provide legitimacy, provide cover, allowed a lot of regional players to get involved. What you do you do at that stage? Would - do you think that the United States should be moving down a unilateral path here?

ABRAMS: Well, it wouldn't be unilateral. I think we would be consulting with the Arab League, with the Turks, with the GCC, the Gulf Corporation Council countries, because, in fact, there is a very large amount of support against the Assad regime. It doesn't happen to include Iran, Russia and China.

The question now, really, is who is going to win - the Russian, Chinese, Iranian side backing Hezbollah, backing Assad? Or the other side, which includes the Saudis, the Turks, the Europeans, the Arab League, the GCC, and us?

Now, Assad is willing to kill to prevent himself from being ousted from power, and the question really is are we going to back the other side, along with the Arabs? Are we going to back them with words, or, you know, to back them with something a little bit more tangible?

ZAKARIA: What would that more tangible thing be, Elliott?

ABRAMS: More tangible thing would be the kind of support that was given initially in Libya. That is, I would give them money, and I would give them arms. That's both of the two things they need right now.

They don't need American airplanes. But they do need what would, from our point of view, be covert support. I would hope that it would come from Arab countries rather than directly from the United States. But they're being slaughtered, and they have rifles, and we should not watch that happen and sit by. We should give them help, concrete help.

ZAKARIA: Fawaz, would that expand this incipient civil war?

GERGES: That's a terrible advice, Fareed, because the worst thing that can happen to the uprising, the awakening, is the militarization of the Intifada, because that would exactly play into the Assad's basically worldview, and the United States has been correct saying that the most effective means to basically dislodge Assad is to have a tipping point.

What we need to understand, Fareed, in the last 10 months, there has been a war being waged against the Assad regime by Adanese (ph). You have a financial war, economic war, psychological war. The squeeze is amazing, and I mentioned I just came back. How much - I mean, the Syrian people, and the Syrian economy is being hurt.

Because if we do arm the opposition, if we try to go that particular road, Syria will descend into all-out civil war. Already Syria is on the verge, on the brink. We should struggle very hard to convince the opposition to remain a political - and help the (ph) opposition, because the tipping point, Fareed, I believe the social balance of forces inside Syria.

Once the middle class fully joins the uprising, Assad is a goner, I believe.

ABRAMS: Here is - if I could just -

ZAKARIA: Yes.

ABRAMS: Here is the problem with that, I think. The longer this fighting goes on - and this is a war of the regime against the people. The longer this regime fights the people, kills the people, kills a Sunni majority population, the harder it's going - it is going to be at the end to pull the pieces back together to avoid revenge and to get reconciliation.

If this goes on for another nine or 12 months, there will be too much blood will have been shed. That's why it's important, I think, to bring it to an end sooner.

ZAKARIA: Rami, let me ask you a final point, which is about Iran. Iran is really the main sponsor of this regime. This doesn't look very good for them as the regime - as Syria gets squeezed, as this descends into turmoil. How do you think this is being seen in Iran and how is it seen in the region?

KHOURI: Iran is emerging as probably one of the great losers from the current Arab uprisings all across the region, and the Iranians probably have to look at home because they're not impervious to these kinds of uprisings themselves, either. There's tensions within Iran.

But this is going to be played out in Syria. This is a battle between the - the rulers of Syria and the - many of the people of Syria.

As Fawaz correctly said, there is strong support for the regime, as there was for Chauchesku, as there was for other leaders who are overthrown, finally, by their own people. So the Syrian regime's in trouble, the Iranian can help it, but once the erosion starts in the pillars of the regime, the security, the Alawites, some of the minorities and the middle class in Aleppo and Damascus. And all of this is happening to a very slight extent, but it's been increasing over the last eight, 10 months. The trend is very clear, and I think foreign military intervention would probably be catastrophic, and to hear Americans suggest this is to think back what they did in - in Iraq and what an extraordinary catastrophe that has been. That's still plays itself out today.

So I think we need to feel the pain of the Syrian people. It's a terrible thing to watch them as we do here, and we see the refugees coming into Lebanon and the businessmen and the civil activists telling us what's going on. But, in the end, this has to be played out in Syria, and I think it will be.

ZAKARIA: Rami Khouri, Fawaz Gerges and Elliott Abrams, thank you very much. Fascinating discussion of a very important issue. We will check back with you shortly, I'm sure.

And we'll be back.

(END VIDEOTAPE)

(BEGIN VIDEO CLIP)

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: I'm not concerned about the very poor. We have a safety net there. If it needs repair, I'll fix it.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

ZAKARIA: Now for our "What in the World?" segment. Remember Mitt Romney's infamous "poor" comment?

(BEGIN VIDEO CLIP)

ROMNEY: I'm not concerned about the very poor. We have a safety net there. If it needs repair, I'll fix it. I'm not concerned about the very rich; they're doing just fine.

I'm concerned about the very heart of America, the 90, 95 percent of Americans who right now are struggling."

(END VIDEO CLIP)

ZAKARIA: Well, it got me thinking - Romney was actually being honest about Americans in general. We don't - none of us - spend much time thinking about the very poor. But we should, because we have a real problem in this area - an economic, political and moral problem.

Now, by Romney's calculations, if 95 percent of Americans fall in the middle class - how that can be is another question - then there must be five percent of Americans who qualify as poor.

Well, no. The number from the OECD, the association of the world's developed economies, is actually 17.3 percent of Americans who are poor.

And how do we compare with other rich countries? We rank 31st of the 34 countries that make up the OECD. Of the 34 member states, only Mexico, Chile and Israel are worse off than we are. The UK has a poverty rate of 11 percent, Germany 8.9 percent, and France 7.2 percent. They're all much lower. The OECD average is 11 percent, well lower than ours.

Let's look at another chart. This one's even more worrying for Americans. The percentage of children living in poverty. We come in at 20.6 percent of our children. Again, far worse than other rich countries. Japan, Australia, the U.K., Germany and France all have much better numbers.

Mitt Romney spoke about how he would fix the safety net for poor people "if it needs repair." Well, let me suggest one place it desperately needs repair, and that is in the areas of child poverty.

Now, whatever the causes of poverty, when children grow up in desperate circumstances - circumstances that they had no role in creating - studies show that they will be more likely to drop out of high school, be unemployed, use drugs, have children out of wedlock and get sick. In other words, they will be unproductive members of society and they will cost taxpayers huge amounts of money over the course of their lives.

Children in extreme poverty do badly even when they're smart. A recent U.S. study tracked a group of eighth-graders in 1988. It found that students who did very well on a standardized test but were poor were less likely to get through college than their peers who tested poorly but were well-off.

Now, look at health care. A key indicator of the level of health in a country is its infant mortality rate. That's when a child dies within the first year of his or her life.

Let's compare again. We're at about six deaths for every 1,000 live births. Again, the U.K., Australia, Germany, France, Japan all fare much better. Japan's rate is less than half ours, and this is simply because many mothers in America don't have access to prenatal care. Malnutrition and poor childhood health care set in motion a lifetime of poor health, which of course means huge costs to the system and to taxpayers.

On indicator after indicator, the U.S. compares badly with other rich nations on not only how impoverished it is but also the facilities and opportunities it is giving the very poor. That's why social mobility has stalled in America. Compared to other rich countries, poor Americans are more likely to stay poor.

This chart shows how more than 40 percent of American men whose fathers had earnings in the bottom fifth end up in the same bracket. Britain, Denmark, Finland and Norway all perform much better. The sad part is these statistics are reversible.

I'll show you one last chart. Compare child poverty rates in America and the U.K. over time. You'll see that the U.K.'s rates were halved within a decade from the mid-1990s on. The U.S., on the other hand, has actually had arisen its child poverty rates since then. Now, there's no secret sauce here. Tony Blair's Labour government simply made reducing child poverty a priority through various programs.

So, Mitt Romney, yes, the media took your comments out of context. But you do need to be concerned about the very poor. Actually, we all do.

And we'll be right back.

(BEGIN VIDEO CLIP)

ZAKARIA: What is your prognosis of the American economy right now?

GEORGE SOROS, CHAIRMAN, SOROS FUND MANAGEMENT: It definitely shows some signs of revival.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

CANDY CROWLEY, CNN CHIEF POLITICAL CORRESPONDENT: I'm Candy Crowley in Washington.

FAREED ZAKARIA GPS will be back in 90 seconds.

But, first, "SHOWBIZ TONIGHT" Correspondent Nischelle Turner in our Los Angeles Bureau on the death of Whitney Houston. Nischelle, I know you were at the hotel last night. Tell us a little bit about the Clive Davis' party where Houston was supposed to attend and sing, I understand.

NISCHELLE TURNER, CNN CORRESPONDENT, "SHOWBIZ TONIGHT": Yes, Candy. You know, there was talk early on would they go on with the party or would they not? And Clive said after speaking with Whitney's family, he decided to continue with the party last night, in part, to honor her and her music memory.

You know, one of the things that folks were saying on the red carpet last night, is that they will miss that voice. That she was the gold standard in the music business that every singer out there aspired to be.

You know, we spoke with some of the people that were closest to her, speaking of Gladys Knight and David Foster, and they told us just how shocked they were to hear this news.

(BEGIN VIDEO CLIP)

GLADYS KNIGHT, SINGER: I have known her from a little girl up and her family, of course, and I'm venturing out to say this, and it may get some flack, but there will never be another voice like that. DAVID FOSTER, MUSIC PRODUCER: I got the rare privilege to be front and center when Whitney Houston, the race horse, and it's just shocking. It's beyond.

(END VIDEO CLIP)

TURNER: And David Foster, most notably, Candy, worked with Whitney Houston on both "The Preacher's Wife" soundtrack and "The Bodyguard" soundtrack, that soundtrack that was so amazing and so big for her. Back to you.

CROWLEY: Nischelle Turner for us out in L.A.

And that's your top story. "RELIABLE SOURCES" is at the top of the hour. Now back to FAREED ZAKARIA GPS.

(BEGIN VIDEOTAPE)

ZAKARIA: Joining me now the billionaire businessman, George Soros, one of the world's best known financiers and philanthropists. Welcome back to the program, George.

SOROS: My pleasure.

ZAKARIA: George, what is your prognosis of the American economy right now? It does seem to be doing better than the eurozone, than Japan. How do you read it?

SOROS: It definitely shows some signs of revival. Very important is the emergence of shale gas and shale oil as a cheap source of energy which has made manufacturing more competitive.

Also, the fact that you now had several years of no - no wage growth, so wage disparities have been reduced, and so all this is bringing a very welcome relief. I'm worried that the politics of the election are going to interfere and put a lid on this, because the Republicans don't want to face the elections with Obama can claim to have some seed to the economy and recover.

So they will continue to push for austerity, no new taxes, and, therefore, cutting of services which will depress economic activity and employment, so it will be a break on the politics. It will be a break on the recovery this year.

After the elections if the Republicans win, actually, they'll undergo miraculous transformation where they'll discover that actually it wouldn't be so bad. Therefore, we can afford to have some stimulus.

ZAKARIA: So you think Mitt Romney, if elected, would pursue a similar progress?

SOROS: I think - I'm pretty sure that would happen.

ZAKARIA: When you -

SOROS: I mean, of course, Obama would like to as well. He may find it more difficult if the Republicans continue to obstruct him.

ZAKARIA: Do you think - so in a sense you feel that some part of this Republican opposition to an additional stimulus is - is just cynical. They want the economy to stay weak in an election year.

SOROS: Unfortunately, our political system is now not functioning the way it used to in the sense that - that the political parties are more determined to destroy each other. And then to reach a policy step that would benefit the country.

ZAKARIA: But you're still in favor of more stimulus?

SOROS: But, your need - you have to be a little bit more selective because you really have to spend money in ways that would eventually pay for the interest, repay the investment.

So I think we should distinguish between investments that bring a return, whether it is investment in human resources like education or infrastructure like broadband or high speed rail or whatever, which I think would be very beneficial and tunnel under the Hudson would - this would be the time to build it because that would create employment and would eventually repay.

So - however, the idea now has been established very successfully that nothing that the government does can pay for itself. And that is - it should not be the case. I think this is a politically inspired campaign which is self-fulfilling because if you believe the government is bad, you can do a lot to make sure that the government deposit is bad.

So this is what - where the political processes, I think, have led the country into a dead end, and that is what we need to somehow get out of.

ZAKARIA: Well, a lot of businessmen say that the Obama administration has placed a huge burden of regulations, taxes, health care, energy, financial services. Your own fund decided to reclassify itself as a family office to escape some of these regulations. Is it true? Do you feel that there is too much of a burden?

SOROS: No. I think there's a real quandary here. Because take, for instance, the financial markets. The crisis we are in was created in the private sector. It's by deregulation and globalization that the financial system was left on its own and it grew like cancer, and it became far too big and extracted far too much of the profits produced by the economy for its own purposes.

It was up to 30 percent of the total earnings - profits in the U.S. economy were in the financial sector. That was unsound. The financial services clearly don't contribute 30 percent to the well- being of the country.

So this also created imbalances led to excessive leverage, excessive indebtedness which then led to the financial collapse which today we suffer from. So that is - that came from the private sector, so the - it means that the private sector and the financial sector, in particular, does need to be regulated.

That stability needs to be an objective of public policy because markets don't correct their own excesses. So, however - and this is where the quandary comes in. Regulation is also imperfect. And in many ways more imperfect than the markets because it tends to be very bureaucratic, so it's always lagging behind.

So you have two - two very imperfect systems let's say that need to be reconciled with each other.

ZAKARIA: What about taxes, do you think - you support President Obama's proposal to increase taxes on the wealthy?

SOROS: Yes, I very much do so because it's - the big boom, the super bubble really resulted in the great increase in inequality. Now we have the after effect where you have slow growth one way or the other.

But if you could have better this solution of income, then the average American would actually be better off as a result, but that is totally politically unacceptable. And I haven't heard President Obama particularly pushing it either, so - but that's where I think the country could - could really benefit.

ZAKARIA: People were surprised to see that Mitt Romney was paying only 13.5 percent, 13.9 percent in taxes. Would it be fair to say if we were to look at your returns since most of it comes from investments, you would probably pay something in the same range?

SOROS: Yes. And, actually, I would probably be the biggest loser if you had a minimum, which is what's being proposed, because I just give all my effectively the maximum amount I can to my philanthropy, and, therefore, I don't pay taxes on it.

So my tax bill would - would go up a lot if you had a minimum tax, but I'm willing to pay that because I think if everybody who made (INAUDIBLE) as I do, gave as much money as I do, I wouldn't advocate it, but I think the free riders should also pay.

(END VIDEOTAPE)

ZAKARIA: And we will be right back after this break with more with George Soros. We're going to talk about Europe and whether there is going to be a European crisis, and about President Obama's handling of the American economy, when we come back.

(COMMERCIAL BREAK)

(BEGIN VIDEOTAPE)

ZAKARIA: And we are back with George Soros, one of the world's richest, most successful investors and also one of its most generous philanthropists.

Do you think that President Obama has done a good job, all things considered? SOROS: Look, he has done a kind of mixed - a mixed job. I think that the problems that he inherited because he came in immediately after the financial crisis, were bigger than any president could have immediately - you know, Hoover was elected in '28. He was actually a very capable president, but this name is mud.

Roosevelt came in '32, and he actually was my favorites. He made some mistakes at the beginning, but nevertheless, things have recovered.

So whoever gets elected now has a much better chance of being successful than Obama had.

ZAKARIA: Will you create a Super PAC to help President Obama?

SOROS: No, I mean, that's - I haven't decided, but I think it's a big, big issue that the Citizens United has really unleashed private money for political purposes that can be used anonymously, and this would create an unequal playing field which would further destroy the political system.

And let's say I basically have given my money for on principle not for pursuit of my private interests, and I've always done it very openly saying what I'm doing. So whatever I decide I will state what I'm deciding, but I'm distressed by the problem that the Citizens United has - has created.

ZAKARIA: Will you vote for President Obama?

SOROS: Definitely.

ZAKARIA: You are very worried about Europe. You think that it is - it is moving in the wrong direction and moving toward a catastrophe.

SOROS: Well, I think a catastrophe will be avoided. But Greece is a sick situation. It has been mishandled by the European authorities because they charge a premium on the rescue package, and it's basically, politically the dynamics that are very bad, and that is a general problem in Europe.

The European Union has a desirable (INAUDIBLE) sort of being created. It was a desirable objective. People like me and people in Europe were very excited about it. As a reality, it's more of an imposition than it is something desirable.

ZAKARIA: If you were still running your $25 billion, would you bet against the Euro right now?

SOROS: No. That's a separate issue. I think the Euro can go either way. It's a 50-50 proposition. The problems of Europe don't translate into a bet against the Euro. If anything, I would say that the Euro is more likely to appreciate than not.

But (INAUDIBLE) because on the hand, the European Central Bank is moving towards being like the Federal Reserve and basically creating a lot of credit and that all too weaken the Euro.

ZAKARIA: Would it be fair to say that your prognosis for Europe is probably no crisis, no dramatic collapse of the Euro, eurozone, but very, very slow growth as a result of the system-wide austerity program.

SOROS: Yes. Well, you see, what has happened is that the better countries within the eurozone have found themselves in the position of third world countries that have become heavily indebted in a foreign currency. So they are relegated to this inferior status.

This is what happened to Latin America in the 1980s when you had a similar, very similar situation and that resulted in the lost decade for Latin America. And so right now the European Union and particularly the heavily indebted countries face a lost decade.

It might actually be longer than a decade because Japan has had a similar situation with a real estate boom and the banking crisis has had now 25 years of no growth, and that will create tensions within the European Union which could destroy the European Union, and that's a real danger.

ZAKARIA: George Soros, thank you very much.

SOROS: Pleasure.

ZAKARIA: And we will be back.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

ZAKARIA: This week, Queen Elizabeth II marked the 60th anniversary of Ascension Day, the day her father, the King, died in 1952 and she became queen. Her coronation came the following year.

She marked the anniversary by visiting schoolchildren, but my question of the week is, where was Elizabeth on that day in 1952 when she suddenly became queen? Was she, A) Sailing on adjunct (ph) in Hong Kong harbor; B) Swimming at the hotel Bel-Air and Beverly Hills; C) Cutting a ribbon in New Zealand celebrating its Independence Day; or D) Sitting in a tree house in Kenya.

Stay tuned and we'll tell you the correct answer. Make sure you go to CNN.com/Fareed for 10 more questions. While you're there, check out the rest of our offering on our Global Public Square website. And don't forget you can follow us on Twitter and Facebook.

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This week's "Book of the Week" was written 2,000 years ago, but it is remarkably current. The great orator, Marcus Cicero, was running for Roman council, the top job in the Republic. His brother, Quintus Tullius Cicero gave him a set of notes on how to win an election.

And there's a new translation that has been published. The advice is just as relevant today. For example, he advises promise everything to everyone. When you don't deliver, some will forget, others will have moved on. If you don't promise them now, the younger Cicero suggests, everyone will be upset. Read this book to see how some basics in politics really never change.

And now for "The Last Look." This week, all of the members of the British Cabinet got birthday presents. Not for their birthdays, but for the 200th birthday of Charles Dickens, and the gifts presented by the Culture Minister were works by the great Victorian novelist that seemed relevant to the recipients.

For example, Prime Minister Cameron got "Great Expectations" to any incoming leader, but also "Hard Times," which is an attack on doctrines of laissez-faire. Foreign Secretary William Hague was criticized last year for using private planes instead of commercial airlines. His gift? The book "The Uncommercial Traveller."

Business Secretary Vince Cable was dubbed scrooge last year after he said he was sending no Christmas cards to members of Parliament. So he got, obviously, "A Christmas Carol."

Lord Strathclyde, the leader of the Antique House of Lords with its arcane procedures got "Bleak House," which is a book about a never ending court case.

And what was the book from Nick Clegg, the Deputy Prime Minister from the liberal Democrat Party who's always wanted a bigger role and more power? "Oliver Twist," of course about the boy who says -

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UNIDENTIFIED MALE: Please, sir, I want some more.

UNIDENTIFIED MALE: More?

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ZAKARIA: What do you say, Mr. Cameron?

The correct answer to our "GPS Challenge Question" was, D, Elizabeth Windsor was in a Tree House Hotel in Kenya when she suddenly became Queen Elizabeth II upon the death of her father, King George VI 60 years ago this week.

Thanks to all of you for being part of my program. I will see you next week. Stay tuned for "RELIABLE SOURCES".