George Soros believes in an “Open Society” based on freedom. During his interview for the February 11, 2016 issue of the German magazine – Wirtschafts Woche, George Soros admitted that the European Union (EU) epitomized his vision of the best society. Unfortunately, due to numerous crises, the very survival of the EU may be at risk.
“What is European Union Policy?
In 2008, the PIIGS (Portugal, Italy, Ireland, Greece and Spain) ran amok through the European Union. Each had serious economic problems. Unfortunately, the continent seemed taken aback by the enormity of the difficulties.
The EU had hoped to be a loose confederation of nations that would benefit with a common currency, called the euro. But, in 2008, some of the nations started to regret their sacrifice of their own national currencies.
“Devalue Currencies to Recreate Balance”
In 1992, George Soros bet on NY Books that the United Kingdom would be forced to devalue its pound currency. With the creation of the EU, the British no longer could claim as much control of the continent. Soros won that bet because he understood economic fundamentals.
National sovereignty allows for the adjustment of currencies to handle different economic scenarios. Nations can raise the currency value to increase investments or lower the currency value to make exports more affordable. European union nations no longer have this national sovereignty due to the euro.
“Xenophobia Still Exists”
Historically, southern European nations, such as, Spain, Portugal, Italy and Greece tended to have higher budget deficits than their northern European brethren, Germany, Holland and Austria. The southern Europeans could simply devalue their currencies when they were independent. They were stuck when they all shared the euro.
As Europe experienced worsening economic conditions, the calls for xenophobia, racism and secession have increased. Soros has noted all of these disturbing trends in his 2014 book – The Tragedy of the European Union. The wealthier Europeans feel like they are subsidizing the poorer Europeans. Greece is the poster child for these problems. Germany feels like they are paying for the irresponsible policies of the Greek government.
“Soros Believes Merkel Should Have Renegotiated Greek Debt in 2008”
The New York Times Book Review has provided a snippet of the George Soros interview for Wirtschafts Woche including his stark admission that “Greece was mishandled from the beginning….” Soros had advised Europe to renegotiate the Greek debt in 2008.
The dangers in 2016 are that the unresolved issues of the past are threatening the EU’s existence in the future. It is like the opening of Pandora’s Box. Soros warned: “… the very survival of the EU is at risk.”