• 30 May 2018
• Posted in: Management & Leadership

Delivering a keynote address at the European Council on Foreign Relations Annual Meeting in Paris this week, George Soros put Brexiteers and Europhiles alike on-notice; unveiling plans to support Best for Britain’s campaign for a second Brexit referendum, but conceding that the EU “needs to reinvent itself’ amidst an existential crisis that ‘is no longer a figure of speech but the harsh reality.”

“People of my generation were enthusiastic supporters of the process... I personally regarded the European Union as the embodiment of the idea of the Open Society. It was a voluntary association of equal states that banded together and sacrificed part of their sovereignty for the common good.”

The Hungarian-American billionaire recognised that what was once the European Coal and Steel Community – “a small band of visionaries led by Jean Monnet” in the 1950s, is a far-cry from the model of the European Union that exists in 2018: “since the financial crisis of 2008 the European Union seems to have lost its way. It adopted a program of fiscal retrenchment which led to the Euro crisis. This transformed the Eurozone into a relationship between creditors and debtors where the creditors set the conditions that the debtors meet. The debtors couldn’t meet those conditions and that created a relationship that is neither voluntary nor equal.”   

It’s this transformation that, Soros believes, has led to growing dissatisfaction with the EU in European nation states, evidenced by the growing anti-EU sentiment amongst voters and the rise of populist, nationalist political parties and leaders - such as the Five Star Movement in Italy, Viktor Orbán in Hungary and UKIP in Britain: “As a result, many young people today regard the European Union as the enemy that has deprived them of jobs and a secure and promising future. Populist politicians exploited the resentments and formed anti-European parties and movements.”

The theme of the ECFR’s Annual Council Meeting was ‘defending Europe in the New World Disorder’; a motif that was particularly pertinent considering the political turmoil engulfing Italy this week. The Euro-zone’s third largest economy has been without a government since March, when an inconclusive election left the country without a clear victor as no party or group could form a ruling majority. Soros citied the unravelling of the Italian democratic process as another example of the damage that the resurgent populist sentiment in Europe can potentially inflict: “Italy has suffered from a similar experience recently and the political repercussions have been even more disastrous: the anti-European parties almost took over the government. Italy is now facing elections in the midst of political chaos.”     

The two populist parties that swept-up most of the vote in May’s election, The League and Five Star Movement, have been unable to construct a coalition government after the sitting President, Sergio Mattarella, vetoed the appointment of Paolo Savona as the coalition’s finance minister as a result of domestic and foreign investors raising concerns over a Eurosceptic assuming control over the nation’s purse strings. The President’s decision has resulted in the populist parties calling for his impeachment and mass protests; suggesting Brussels and Germany are exerting influence over the nation’s politics in the interest of protecting the fiscal security of the European Union.      

On the fringes of another conference taking place in Paris this week - the Organisation for Economic Cooperation and Development’s annual forum, Phillip Jennings, general secretary of the UNI Global Union that represents in excess of 20m workers from 900+ trade unions around the world echoed Soros’ concerns that the European Union is going through turbulent times and failing to faithfully represent Europeans: “Two-thirds of the people doing some kind of work in this world have no proper contract and no proper terms and conditions of employment so this backlash against globalization is real. Politicians have to reconnect with the concerns of people, they have to reconnect to improve their conditions, improve their work experience and to say we’re going to accompany you through this revolution… We feel that democracy in Europe is going through a very difficult phase, if not, a crisis… because, at the end of the day, I don’t think these populist parties have an economic agenda.”

Soros, known to some as the man who ‘broke the Bank of England’ by betting on Black Wednesday in 1992 and cashing-in a reported $1bn, framed Brexit as an example of ‘territorial disintegration’ that could be detrimental to both sides of the equation both fiscally and societally:

“Brexit is an immensely damaging process, harmful to both sides. Most of the damage is felt right now when the European Union is in an existential crisis, but its attention is diverted to negotiating a separation agreement with Britain. That’s a lose-lose proposition, but it could be converted into a win-win situation… The economic case for remaining a member of the EU is strong, but it will take time for it to sink in. During that time the EU needs to transform itself into an association that countries like Britain would want to join, in order to strengthen the political case.”

Whilst delivering his keynote, Soros noted that Best for Britain, the campaign group behind the push for a second Brexit referendum, will be releasing a manifesto as soon as June 8^th; outlining their strategy and reasoning behind pursuing a second vote. Lord Malloch Brown, the former Foreign Office minister who chairs the group appeared on Wednesday’s edition of BBC Today programme to echo Soros’ call for a renewed effort on the UK’s behalf to remain in the European Union:

“Democracy is a history of U-turns. The day that Britons just settle back and accept one election victory as the end of democracy – that power is in party forever – is an unlikely moment. It is the same with this referendum, it was a referendum on the principle to negotiate a deal for exit. We will soon see the terms of that deal and its already evident from the confusion in the government that those terms are going to offer Britain a much less good economic prospect than we already enjoy. I think the British people who have been very badly let down by their politicians on all sides of this then deserve the right to have the final say on is this deal good for us or not.”