Europe is experiencing an existential crisis, and this is no longer a figure of speech but the harsh reality, Hungarian-born investor and philanthropist George Soros said today in a keynote address in Paris. Europe needs to do something drastic to escape, according to Soros, arguing that the continent needs to “reinvent itself.”
The European Council on Foreign Relations (ECFR) think tank met in Paris to debate the major challenges and opportunities facing Europe. The ECFR includes 270 former European heads of state, prime ministers, foreign ministers and EU commissioners.
On Tuesday, Soros delivered a keynote address entitled “How to save the European Union.” To begin, Soros observed that “the European Union is in an existential crisis. Everything that could go wrong has gone wrong,” adding that since the financial crisis of 2008 the European Union “seems to have lost its way.”
“[The EU] adopted a program of fiscal retrenchment which led to the euro crisis,” he recalled. “This transformed the eurozone into a relationship between creditors and debtors where the creditors set the conditions that the debtors had to meet. The debtors couldn’t meet those conditions and that created a relationship that is neither voluntary nor equal.”
“As a result, many young people today regard the European Union as an enemy that has deprived them of jobs and a secure and promising future,” Soros observed, adding that “populist politicians exploited the resentments and formed anti-European parties and movements.”
Then came the refugee crisis of 2015, Soros recalled, noting that although most people initially sympathized with the plight of refugees, “they didn’t want their everyday lives disrupted by a breakdown of social services [and] were also disappointed by the failure of the authorities to cope with the crisis.”
In this environment, Soros observed, “unscrupulous leaders” have exploited the situation even in countries that have accepted hardly any refugees.
“In Hungary, [Prime Minister] Viktor Orbán based his reelection campaign on falsely accusing me of planning to flood Europe, Hungary included, with Muslim refugees,” said Soros. “He is now posing as the defender of his version of a Christian Europe that is challenging the values on which the European Union was founded. He is trying to take over the leadership of the Christian Democratic parties, which form the majority in the European Parliament.”
According to Soros, Europe faces three pressing problems: the refugee crisis; territorial disintegration as exemplified by Brexit; and the austerity policy that has hindered Europe’s economic development. In his view, bringing the refugee crisis under control “may be the best place to start.”
“I have always advocated that the allocation of refugees within Europe should be entirely voluntary,” Soros said. “Member states should not be forced to accept refugees they don’t want and refugees should not be forced to settle in countries where they don’t want to go. The voluntary principle ought to guide Europe’s migration policy.”
At the same time, he added, the EU must protect its external borders, but keep them open for lawful migrants.
“Member states in turn must not close their internal borders. The idea of a ʼfortress Europeʼ closed to political refugees and economic migrants alike violates both European and international law and in any case it is totally unrealistic,” he noted.
“Europe wants to extend a helping hand towards Africa (and other parts of the developing world) by offering substantial assistance to democratically inclined regimes,” he continued. “This would enable them to provide education and employment to their citizens. They would be less likely to leave and those who did would not qualify as refugees. At the same time, European countries could welcome migrants from these and other countries to meet their economic needs through an orderly process. In this way migration would be voluntary both on the part of the migrants and the receiving states.”
Soros said he believes that such a “Marshall Plan” would also help to reduce the number of political refugees by strengthening democratic regimes in the developing world. However, he added, such a plan for Africa would require at least EUR 30 billion a year for a number of years, and member states could contribute only a small fraction of this amount even if they were ready to do so.
In terms of the financing of such a plan, Soros stressed that the European Union has a high credit rating and its borrowing capacity is largely unused.
Accordingly, Soros put forward “an out-of-the-box proposal” which he did not detail, but insisted that it contains “an ingenious device that would enable the European Union to borrow from the market at a very advantageous rate without incurring a direct obligation for itself or for its member states.”
Soros claimed that the method has “already been successfully used in other contexts, mainly in general revenue municipal bonds in the U.S. and also in surge funding for infectious diseases.”
As for territorial disintegration, Soros described Brexit as “an immensely damaging process, harmful to both sides.”
“Ultimately, it’s up to the British people to decide what they want to do,” stressed Soros, while adding that “it would be better, however, if they came to a decision sooner rather than later.” This, he added, is the goal of the initiative he supports named “Best for Britain.”
“Best for Britain fought for, and helped to win, a meaningful parliamentary vote which includes the option of not leaving at all,” he explained. “This would be good for Britain but would also render Europe a great service by rescinding Brexit and not creating a hard-to-fill hole in the European budget. But the British public must express its support by a convincing margin in order to be taken seriously by Europe.”
Soros also said that the aim should be to create a “multi-track Europe,” rather than the current multi-speed Europe, which he said would allow member states a wider variety of choices.
“Right now, attitudes towards cooperation are negative: member states want to reassert their sovereignty rather than surrender more of it,” Soros noted. “But if cooperation produced positive results, attitudes may improve and some objectives, like defense, that are currently best pursued by coalitions of the willing may qualify for universal participation,” he concluded.
The full speech is available here.