Tuesday

22nd Jan 2019

Iran fiasco could cause EU financial crash: Soros

The EU is staring down the barrel of a "major financial crisis" and an "existential" threat, but Brexit, one of its biggest problems, could be overturned.

That was the message in a speech in Paris by George Soros this week.

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  • Orban (l) exemplified rise of EU populists, Soros said (Photo: premier.gov.pl)

"We may be heading for another major financial crisis," the 87-year old billionaire trader and philanthropist, who was born in Hungary, but who lives in New York, said.

"The European Union is in an existential crisis. Everything that could go wrong has gone wrong," he said.

The US decision to pull out of the Iran nuclear arms control treaty could undermine market confidence in the US-European alliance, the world's top military and economic bloc, Soros said.

"We are now facing the termination of the nuclear arms deal with Iran and the destruction of the transatlantic alliance. This is bound to have a negative effect on the European economy," he said.

Soros spoke at a meeting of the European Council of Foreign Relations, a think tank, in the French capital, on Tuesday (29 May).

The EU faced an "existential" threat from the rise of populists in Europe, fuelled by the migration crisis, he also said.

"Unscrupulous leaders have exploited it [the migration crisis] even in countries that have accepted hardly any refugees. In Hungary, [prime minister] Victor Orban based his reelection campaign on falsely accusing me of planning to flood Europe, Hungary included, with Muslim refugees," Soros said.

"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," Soros added.

Brexit

Brexit, which he called "an immensely damaging process", "exemplified" how populist forces could wreak EU "territorial disintegration", he said.

The UK decision to leave the EU next year could still be overturned by a British parliamentary vote or a second referendum in the next five years, he also said, however.

"Divorce will be a long process, probably taking more than five years. Five years is an eternity in politics," he said.

"The British public must express its support [for staying in the EU] by a convincing margin in order to be taken seriously by Europe," he said.

Soros earlier contributed €800,000 to a pro-remain group, called Best for Britain, in the UK.

His Paris remarks were dubbed anti-democratic by pro-leavers in Britain's ruling Conservative Party.

"George Soros wants to overturn the largest democratic mandate in British electoral history," Andrea Jenkyns, a Tory MP told The Times, a British newspaper, on Wednesday, referring to the Brexit referendum in 2016.

Jacob Rees-Mogg, another Tory MP, told the LBC radio station: "We had the biggest democratic exercise in our nation's history - 17.4 million people voted to leave and of course that should be implemented. If, in 30 years' time, the UK wants to rejoin, that would be a matter for the electorate then."

Marshall Plan

The EU should also get its house in order on migration if it wanted to regain political ground from populists, Soros added in Paris.

Paying for African states to become more attractive places to live was the only way to reduce the numbers of people coming to Europe in the long term, he said.

The "Marshall Plan for Africa" would "require at least €30bn a year for a number of years" he said, referring to the US programme that paid for the reconstruction of Europe after World War II.

That meant member states such as Germany and France might have to set aside concerns on debt and extra EU spending, he indicated.

"Throughout history, the national debt always grew at times of war," Soros said.

"Harsh reality may force member states to set aside their national interests in the interest of preserving the European Union," he said.

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