Billionaire investor George Soros discussed the strong potential for another devastating global economic crisis, in a speech he delivered on Tuesday, in Paris. In no uncertain terms, he said that “everything has gone wrong” and another “major” financial crisis is coming. “Brexit is an immensely damaging process harmful to both sides,” said Soros. While Europe continues to wrestle with countries considering dissolution of the Euro and problems resulting from a continuing flood of immigrants, its biggest problems may be coming from its American allies, in the form of a collapsed Iran nuclear deal and dissolution of its transatlantic alliance.
Soros announced that the “existential danger” approaching Europe is no longer just a “figure of speech.” Specifically, he stated that “The United States, for its part, has exacerbated the EU’s problems. By unilaterally withdrawing from the 2015 Iran nuclear deal, President Donald Trump has effectively destroyed the transatlantic alliance. This has put additional pressure on an already beleaguered Europe. It is no longer a figure of speech to say that Europe is in existential danger; it is the harsh reality.” Brexit was the beginning of a “territorial disintegration” now being considered by all participants, particularly in the wake of Italy’s soaring bond yields. Soros believes the only way out to be for EU to tap its “largely unused” borrowing authority to finance an African “Marshall Plan.”
Soros blames continuing territorial disintegration on the EU’s entrenched two-tiered system of debtors and creditors. I personally regarded the EU as the embodiment of the idea of the open society. It was a voluntary association of equal states that banded together and sacrificed part of their sovereignty for the common good. The idea of Europe as an open society continues to inspire me. But since the financial crisis of 2008, the EU seems to have lost its way. It adopted a program of fiscal retrenchment, which led to the euro crisis and transformed the eurozone into a relationship between creditors and debtors. The creditors set the conditions that the debtors had to meet, yet could not meet. This created a relationship that was neither voluntary nor equal – the very opposite of the credo on which the EU was based.”
In order to prevent further damage, Soros encouraged the EU to create and invest in a 30 billion euro “Marshall Plan” for Africa that would stem the flow of refugees into Europe, thereby giving an improving economic base the chance to take root. Instead of abandoning the union, Soros suggested that members should pursue a “multi-track Europe,” rather than a “multi-speed Europe.” This approach would allow members to be the best they can be to the mutual benefit of all, rather than forcing some members to pursue a course they are sure to be slower on, ultimately with far less to offer the whole, rather than simple conformity.
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