13 March 2014

George Soros: It is time to stand up for the European Union

There is an important debate under way about the future of Europe and Britain’s place in the EU. I bring a pro-European bias to this debate. The Europe I believe in was intended to be a practical embodiment of the values and principles of the open society; a voluntary association of equal and sovereign states that surrendered part of their sovereignty for the common good. The euro crisis has already transformed the EU from a voluntary association of equals into a creditor-debtor relationship, which is neither voluntary nor equal.

The policy of austerity that Germany imposed on the eurozone countries was the wrong one. The downward pressure has now diminished and this has given financial markets a lift. But the prospect of a long period of stagnation has not been removed and it has set in motion a negative political dynamic. Anybody who finds the prevailing arrangements are intolerable is pushed into an anti-European posture, so I expect the process of disintegration to gather momentum.

Europe is at a crossroads. It faces two crucial decisions: one is the future of the eurozone; the other is Britain’s role in Europe. The eurozone needs to become more integrated. It needs a common fiscal budget policy, a Banking Union and a more level economic playing field.

Right now Britain has the best of all possible worlds – it is part of the European common market but it is not part of the euro. Any change would be for the worst as far as Britain is concerned. I will leave it to the business community, especially the multinationals that use the UK as an entry point into the common market, to explain to the British public what they have to lose: jobs. But Britain’s exit would be a further step in the disintegration of the EU and it would greatly diminish the weight that the Union pulls in the world and that would be a great loss not only for Europe but also for the world.

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See also Graham Bishop's blog: Europe: Miliband + Soros + Merkel = Impenetrable Fog in Channel and Clarity unlikely in Budget, 14.3.14

George Soros' latest book: The Tragedy of the European Union: Disintegration or Revival?

The European Union could soon be a thing of the past. Xenophobia is rampant and commonly reflected in elections across the continent. Great Britain may hold a referendum on whether to abandon the union altogether. Spurred by anti-EU sentiments due to the euro crisis, national interests conflict with a shared vision for the future of Europe. Is it too late to preserve the union that generated unprecedented peace for more than half a century?

This is no mere academic question with limited importance for America and the rest of the world. In the past decade, the EU has declined from a unified global power to a fractious confederation of states with staggering unemployment resentfully seeking relief from a reluctant Germany. If the EU collapses and the former member states are transformed again from partners into rivals, the US and the world will confront the serious economic and political consequences that follow.

In a series of revealing interviews conducted by Dr Gregor Peter Schmitz, George Soros—a man of vast European experience whose personal past informs his present concerns—offers trenchant commentary and concise, prescriptive advice: The euro crisis was not an inevitable consequence of integration, but a result of avoidable mistakes in politics, economics, and finance; and excessive faith in the self-regulating financial markets that Soros calls market fundamentalism inspired flawed institutional structures that call out for reform. Despite the considerable perils of this period, George Soros maintains his faith in the European Union as a model of open society. This book is a testament to his vision for a peaceful and productive Europe.

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