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Friday, March 29, 2024

George Soros Full Remarks – “European Union Is In mortal Danger”

By Jacob Wolinsky. Originally published at ValueWalk.

George Soros is alive and well (despite the rumors) and he is back in the geopolitical arena – this morning warning once again of the dire consequences of the Brexit and what the world must do to prevent another financial crisis. Below are the full remarks according to a transcript obtained by ValueWalk. Stay tuned for further analysis. A spokesperson for Soros did not immediately respond to a request for comment.

Also see George Soros — Global Speculator (The Money Masters)


EMBARGOED UNTIL DELIVERY 9:05 A.M. BRUSSELS TIME


Remarks by George Soros


European Parliament, Brussels. 30 June, 2016.

When I was invited to address this joint hearing, the refugee crisis was the greatest problem Europe faced. Since then it has played a crucial role in bringing about what may prove to be an even greater calamity — Brexit.


The vote for Brexit was a great shock to me and, I imagine, to most people in this room. Last Friday morning, the disintegration of the European Union seemed practically inevitable.


But as the initial disbelief wore off, something unexpected happened, and the tragedy no longer looks like a fait accompli.


Over the past week, buyer’s remorse has begun to set in, as the hypothetical became very real: Sterling plunged, Scotland threatened to break away, and some of the working people who supported the “leave” campaign have started to realize the bleak future that both the country and they personally face. Even the champions of leave are retracting their dishonest pre-referendum claims about Brexit.


In a spontaneous response, over four million people petitioned Parliament to hold a second referendum. By the time the Parliamentary debate on this petition takes place, it is not inconceivable that more people will have signed the petition than voted for Brexit.


Just as Brexit was a negative surprise, the spontaneous response to it is a positive one. People on both sides of the referendum, and most importantly those who didn’t even vote—particularly young people under 35—have become mobilized. This is the kind of grass roots involvement that the European Union has never been able to generate before.


The referendum has highlighted for people in Britain just what they stand to lose by leaving the EU. If this sentiment spreads to the rest of Europe, what seemed like the inevitable disintegration of the EU could be instead creating positive momentum for a stronger and better Europe.


The process could start in Britain. The popular vote can’t be reversed but a signature collecting campaign could transform the political landscape by revealing a newfound enthusiasm for EU membership. This approach could then be replicated in the rest of the European Union, creating a movement to save the EU by profoundly restructuring it. I am convinced that as the consequences of Brexit unfold in the months ahead, more and more people will be eager to join this movement.


What the EU should not do is penalize British voters while ignoring their legitimate concerns about the deficiencies of the European Union.


European leaders should recognize their own mistakes and acknowledge the democratic deficit in the current institutional arrangements. Rather than seeing Brexit as the negotiation of a divorce, they should seize it as an opportunity to fundamentally reinvent the EU so that the UK and others at risk of exit would want to join.


Will disaffected voters in France, Germany, Sweden, Italy, Poland and everywhere else see the EU benefitting their lives? If the answer is yes, the EU will emerge stronger. If the answer is no, it will eventually blow apart.

******

Unfortunately, Brexit has not only created an opening to reinvent the European Union, it has also aggravated two looming dangers.


First, it unleashed a crisis in the financial markets, comparable in severity only to 2007/8. This has been unfolding in slow motion, but Brexit will accelerate it. It is likely to reinforce the deflationary trends that were already prevalent.


The Eurozone has been lagging in the global recovery because of restrictive fiscal policies; now it has to contend with an impending slowdown. The orthodoxy of German policymakers stands in the way of the only effective response: having a Eurozone budget that could adopt counter-cyclical policies.


Meanwhile, the banking system of continental Europe has not recovered from the earlier crisis; it will now be severely tested. We know what needs to be done. Unfortunately, political and ideological disagreements within the Eurozone have stood in the way of using the ESM as a backstop for banks as well as sovereigns.


Second, the EU faces growing military threats. Our external enemies have been emboldened, posing new, as-yet unfathomable dangers in various parts of the wider region, that are also liable to aggravate the refugee crisis.


It is against this background that I propose to discuss the refugee crisis, with special emphasis on the financial needs it presents. I will not address the human rights and development issues in these remarks, but I discuss them in the written remarks submitted to the Committees.


***


The European response to the refugee crisis was riddled with flaws even before the present turn of events.


Chancellor Merkel showed great moral leadership when she opened Germany’s doors wide to refugees. Unfortunately, her initiative was not well thought through; it ignored the pull factor. When the sudden influx of migrants overwhelmed the capacity of the authorities, public opinion turned against her. That is when she struck her ill-fated deal with Erdogan.


I have identified the flaws of that deal in detail.


First, it was not truly European; it was imposed on Europe by Chancellor Merkel.


Second, it was severely underfunded.


Third, it was not voluntary: it imposed quotas that many member states opposed and required refugees to take up residence in countries where they were not welcome, while forcing others who reached Europe by irregular means to be returned to Turkey.


Finally, it transformed Greece into a de facto holding pen with inadequate facilities.


Since then, the situation has only deteriorated. Member states have become increasingly unwilling to cooperate with one another, and are pursuing discordant policies. While migrant flows to Greece have eased considerably, they have surged in the Central Mediterranean.


In these circumstances, a comprehensive and coherent European asylum policy is not possible. The trust needed for cooperation is lacking. It will have to be rebuilt through a long and laborious process.

***


This process should start by addressing the dire lack of financial resources.


Without sufficient funding, the EU cannot meet the expectations of the European people. And because it fails to perform the functions it was designed for, the Union loses its legitimacy.


The refugee crisis illustrates the problem. At least €30 billion a year will be needed both inside the Union—to build effective border and asylum agencies, to ensure dignified reception conditions, fair asylum procedures and opportunities for integration—as well as outside its borders—to support refugee-hosting countries and to spur job creation throughout Africa and the Middle East.


The political and economic costs of inaction would be even greater. Brexit is the starkest example of these consequences. But we also have compromised the Schengen system, driving up the economic costs.


Given that its very survival is at stake, the EU should be putting all of its available resources to use. And yet the triple-A credit of the Union has barely been deployed. This is the height of irresponsibility.


The current approach reallocates minimal resources from the EU budget and

The post George Soros Full Remarks – “European Union Is In mortal Danger” appeared first on ValueWalk.

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