George Soros, one of the world’s leading investors, has warned that the European Union is in danger of falling apart if it fails to confront Vladimir Putin’s naked aggression in Ukraine.
The billionaire financier told The Daily Beast that European governments should have seized on Russia’s land grab in Crimea to breathe new life into a union that is disintegrating and stumbling towards oblivion. Instead, he argued, squabbling European nations have failed to meet the challenge and continued to act in their own narrow self-interest. “Europe was totally unprepared for this crisis and Putin outmaneuvered Europe with no difficulty,” he said.
Soros, who became known as the Man Who Broke the Bank of England after making $1 billion by betting against Europe’s previous financial union, has long insisted that the Euro was being fatally mismanaged. His latest book, published this week, is entitled The Tragedy of the European Union. A loud supporter at the launch of the Euro currency and a cheerleader for a united Europe, Soros has been confounded by what he calls the “nightmare” reality 15 years after its introduction.
Speaking in London, he said it was heart-breaking to see European governments shrug their shoulders at the precise moment the continent was finally witnessing an unprecedented popular uprising in the name of the European Union. “Ukrainians have effectively proved that they are willing to sacrifice their lives to get closer to a Europe that is, at the same time, in the process of disintegration,” he said.
With Putin’s troops in Crimea and a referendum on joining Russia due to be held over the weekend, Soros said there was still time for Europe to act, and reinvigorate the European Union’s withering soul.
“I would argue passionately that [the European Union] should not be a failed experiment and events in Ukraine are a wake-up call to face that issue,” he said. “It’s a challenge, and I hope that Europe will respond to it and actually really rediscover its original mission because that’s what got lost in this distortion that has occurred.”
Angela Merkel, the German chancellor, indicated that Europe was willing to increase pressure on the Kremlin on Thursday during her most emotional and strident speech since the start of the Ukrainian crisis. She said a referendum orchestrated by Crimea’s pro-Russia parliament would be a “catastrophe,” and indicated that the EU was willing to impose travel bans and asset freezes on people and firms accused of helping to violate Ukraine’s territorial integrity as soon as Monday.
Soros argued that it was more important for Europe to offer positive assistance to the struggling Ukrainian government. “It’s very important to respond and respond the right way, which is not necessarily to impose sanctions on Russia, but to actually help Ukraine financially, and also with technical assistance—something like a European Marshall Plan for Ukraine—that would be the right response,” he said.
In his new book, which asks “Is it too late to save the European Union?” Soros argues that Putin’s attempt to build a new Eastern bloc in Ukraine and beyond could eventually jolt Europe back to life. “We have just witnessed a dramatic test of strength between Russia and the European Union. Russia came out ahead,” he said. “Russia has benefited from the fact that Europe is disunited. But now that Russia is emerging as a threat to Europe, it may once again become a force that brings Europe closer together. I pin my hopes on Chancellor Merkel … one must never give up hope.”
He is hardly holding his breath, however. Soros blames the Germans for eroding Europe’s fragile union by enforcing policies of austerity and allowing southern European nations to build up debts they will never be able to repay. He accused Berlin of doing “just enough” to keep the Euro afloat: “This confirms my worst fears. It’s the nightmare I’ve been talking about and there is little chance we’ll wake up soon.”
Germany’s economic strength makes it the Eurozone’s driving force—Britain is not part of the currency union—but the nation’s history has turned it into a reluctant leader. “Germany has emerged as the imperial power, the hegemon of Europe, but the German public does not want to be in that position exactly because of the painful memory of Hitler. It is in denial and is unwilling to live up to the responsibilities,” he said.
Despite its unwillingness to assume a strong leadership role, Soros argues that Berlin’s fiscal rigidity has created a two-tier Europe where debtor countries are at a permanent disadvantage. If that does not change, he said: “We will have a Europe in which Germany is seen not as a leader but as an oppressor and exploiter. It will not be loved and admired by the rest of Europe it will be hated and resisted.”
That resistance has already begun in a swathe of countries where popular anti-European sentiment has been seen on the street and at the ballot box. Europe-wide elections in May are expected to send a record number of politicians to Brussels who are hostile to the very institutions they will be populating. In Britain, the governing Conservative Party has promised a referendum on leaving the European Union altogether. “That would be a big step forward in the disintegration of the European Union,” Soros said. “Britain’s absence would greatly diminish the weight of the EU in the world … The world badly needs Europe’s soft power.”