01 June 2017

George Soros: Standing up for Europe

Today’s EU needs both salvation and radical reinvention. Saving the EU must take precedence, because Europe is in existential danger. But reviving the support that the EU used to enjoy is no less essential, said philanthropist Soros at the Brussels Economic Forum.

We would try to save the European Union in order to radically reinvent it. The first objective, saving Europe, has to take precedence because it is in existential danger. But we wouldn’t forget about the second objective either. The reinvention would have to revive the support that the European Union used to enjoy. We would do it by reviewing the past and explaining what went wrong and how it could be put right. [...]

Were it not for two seismic shocks, the process of European integration would have continued, with the support of EU citizens. The first seismic shock was the break-up of the Soviet Union and the resulting reunification of Germany. And the second was the economic crash of 2008.

The financial crisis of 2008 and the euro area crisis that followed were “the tipping point from integration to disintegration,” Mr Soros said, adding that since that turning point the EU remains in an existential crisis. 
Many young Europeans now regard the EU as an ‘enemy’ that deprives them of a secure and promising future. This feeling was reinforced by the rise of anti-European, xenophobic parties that are motivated by values that are diametrically opposed to the values on which the European Union was founded. 

There are external threats from Russia, Turkey, Egypt and Trump’s vision for the US, and internal threats in the form of what he described as out-dated treaties ever since the financial crisis of 2008, that have rendered the EU itself “dysfunctional in some ways”.  

If the EU ploughs on in this way there would be little hope for improvement, he said. Mr Soros argued that the EU needs to be radically reinvented. No more top down dictats from politicians driven by a vision. Europe needs “a collaborative effort that combines the top-down approach of the European institutions with the bottom-up initiatives that are necessary to engage the electorate,” he said.

Brexit is both a symptom of Europe’s problem and an immensely damaging distraction from the broader issues that is harmful to both sides in the negotiations. Europe must use Brexit as a catalyst for introducing far-reaching reforms, Mr Soros said.

The necessary transformation of the EU must include making a clear distinction between the EU and the euro area. The idea that EU countries outside the EU are considered pre-ins must be scrapped. A euro area as the inner core of Europe, with others relegated to an inferior position as laggards on the same road to “ever closer union” is precisely the idea that has been explicitly rejected by many member states – not just the UK.

“This claim needs to be abandoned. Instead of a “multi-speed” Europe we should aim for a “multi-track” Europe that would allow member states a wider variety of choices,” Mr Soros said, adding that this “would have a far-reaching beneficial effect”.

Mr Soros identified three problem areas where meaningful progress is indispensable: the refugee crisis; territorial disintegration as exemplified by Brexit; and the lack of an economic growth policy.

All three are immense, but Mr Soros said he can see a momentum developing that could tackle these existential threats. He said that for the momentum to gain pace will require a combination of top-down and bottom-up elements.  [...]

Full speech

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