This content is from: Corner Office

Soros Warns European Union Not to “Punish” Britain

In a speech on the state of the European Union at the Brussels Economic Forum, the billionaire financier detailed the EU’s “dysfunction” but said it’s not too late to fix the trading bloc’s problems — Brexit among them.

  • Joe McGrath

George Soros today called on the European Union to “resist the temptation to punish Britain” during the forthcoming Brexit negotiations, warning that the process will be “immensely damaging” and “harmful to both sides.”

The famed investor and Open Society Foundations founder was addressing delegates at this year’s Brussels Economic Forum, in a speech that tackled what he calls the EU’s “existential crisis.” Soros outlined several areas that the EU needs to fix if it is to once again become a desirable cross-border organization.

Speaking specifically about Brexit, Soros said the divorce process could take as long as five years to complete, but he noted that there is time for the EU to change the views of those with whom it has currently fallen out of favor.

“Five years seems like eternity in politics, especially in revolutionary times like the present,” he said. “During that time, the European Union could transform itself into an organization that other countries like Britain would want to join. If that happened, the two sides may want to be reunited even before the divorce is completed.”

Soros’s view of the trading bloc is that the union has become “surrounded by hostile powers,” citing Vladimir Putin’s Russia, Recep Tayyip Erdogan’s Turkey, and Abdel Fattah el-Sisi’s Egypt as potential threats to the organization.

He also cited “the America that Trump would like to create, but can’t” as another threat — despite a recent meeting between U.S. president Donald Trump and European Commission President Jean-Claude Juncker, which the White House characterized as a meeting of “shared values.” A statement from the White House said that both leaders had “agreed that the United States and the European Union should deepen our strong economic relationship.”

Azad Zangana, a former economist at the U.K. Treasury who now works for fund manager Schroders as a senior European economist and strategist, said while Soros’s assessment of the U.S. president is understandable, U.S. government policy in this administration hasn’t been particularly dramatic from an EU perspective.

“It has managed to create more headlines than actual policy change as far as we can see,” said Zangana. “The area where we are more concerned is with the potential rise of protectionism, which could begin with President Trump in the U.S. but could come about from other areas as well.”

Soros stressed the need to rethink the assumption that all EU members were heading towards “an ever closer union.” The phrase has often been uttered by EU bureaucrats in speeches and press interviews, but may be damaging in the current climate, according to the billionaire investor. Soros said EU membership would be much more appealing for member states if they had more control over which parts of the EU they could adopt.

“Instead of a ‘multi-speed Europe’ we should aim for a ‘multi-track’ Europe that would allow member states a wider variety of choices,” he said. “This would have a far-reaching beneficial effect.”

Soros concluded by calling on pro-Europeans to do more to protect the trading bloc, saying that engagement will be key to its survival.

“Those who care about the fate of Europe will have to get actively involved,” Soros said, adding that the EU “needs new rules to maintain its values. It can be done. But it will require resolute action by the European institutions and the active engagement of civil society.”