Business magnate George Soros is convinced that the EU needs to reinvent itself. In an interview with EURACTIV’s partner WirtschaftsWoche, he explained how Europe should deal with Brexit.
George Soros is a Hungarian-American investor, philanthropist, political activist and author, as well as being one of the richest people in the world. In 1992, his investment fund made $1 billion after the UK withdrew from the European Exchange Rate Mechanism. Due to its losses, Soros was dubbed “the man who broke the Bank of England”.
Soros spoke to WirtschaftsWoche’s Gregor Peter Schmitz.
Every week, Europe seems to face a new crisis, whether it’s refugees, the UK leaving the EU, terror attacks or financial ruin. You have promoted European cohesion for decades. Are we on the brink of disintegration?
I am very worried. Europe is about to collapse and has to be completely reinvented. The goal must be to have a European Union that a country like the United Kingdom would want to be a part of. To achieve this, the very nature of the EU has to be put to the test.
What should actually be done?
There are three points that are critical in my view: firstly, the artificial distinction between EU membership and membership of the eurozone must stop. Countries choosing not to adopt the common currency should no longer be treated as second-class members. Secondly, the EU should use its excellent credit rating in order to borrow more for use in investment. Moreover, the member states have to cooperate more on foreign policy, especially in cases such as Ukraine, which wants to belong to Europe. Lastly, there has to be more cooperation on tackling the refugee crisis. I have made numerous proposals to that end.
If all of this were achieved, could Brexit be rolled back?
No, it’s happened and it cannot be undone. It will take many years to implement this decision. The issue is highly complex, given that parts of the UK, such as Scotland, do not want to leave the EU. I can imagine Scotland, Northern Ireland and the Republic of Ireland forming a kind of “Celtic Union” in order to stay in the EU. One thing is guaranteed, the political and economic uncertainty will shake the UK for years to come. However, the country retains the right to hold another referendum later in order to rejoin the EU. This would be easier than the actual exit.
How is it going to affect London’s role as the continent’s leading financial centre?
London’s role as a financial hub will visibly shrink. Many other cities are going to compete for its bankers and institutions, like Paris, Dublin and Frankfurt. The latter obviously has the advantage of being the HQ of the European Central Bank (ECB). But London’s considerable banking know-how is not going to disappear overnight and will remain a factor.
Your €100 million bet on the falling share price of Deutsche Bank has caused a stir. Are you speculating against the European banking system?
Europe’s banking system is less solid and healthy than the US or British systems. After the last global financial crisis, the clean-up was carried out less extensively and less carefully. The state of the Italian banks is particularly worrying, but German savings banks are also not doing so well. Deutsche Bank is clearly the most vulnerable commercial bank as well.
You are 85 and in recent years have focused on philanthropic work. But you’ve been playing the market lately, why is that?
I want to preserve the EU as a whole. That’s a job that isn’t going to be completed in my lifetime. I want the wealth that I have built up to last and to not be lost, so the foundations I have started will go on after I die.