Currently, Europe has to grapple with at least five crises simultaneously: while one is external, four are internal. On the domestic front, Europe has the ever growing issue of migration, Greece, the Euro, and the British referendum on its EU status. The external crisis revolves around the aggression against Ukraine by Russia. Both the authorities and the public in Europe are getting overwhelmed as these crises are reinforcing one another. What then can Europe do to avert the looming EU disintegration process?
It is clear that solving five crises at the same time is not possible or easy. Europe needs to prioritize the crises, giving attention to some while at the same time not altogether neglecting any. For a long time, George Soros has been advocating that the EU needs to give top priority to the Ukrainian issue. This is because the different internal crises are only dividing the Union into creditor versus debtor countries; the Continent verses the UK, and the ‘arrival’ versus “destination’ European nations. However, an external threat to the EU like the aggression by Russia against Ukraine should, in fact, bring the European Union closer.
Maintain Sanctions on Russia for Role in Ukraine
Soros is convinced that the sanctions imposed on Russia for its Ukrainian interventions have in fact, caused more havoc on the Russian economy (and faster) than what many had anticipated. The economic sanctions had sought to block Russian financial institutions and businesses from accessing the international capital markets.
The bigger impact can largely be attributed to a sharp decline in oil prices, without which, according to Soros, the sanctions effect would have been considerably less. The combination of sanctions and oil prices that are lower have effectively pushed Russia into a deep financial crisis comparable to what took place in 1998.
The Greatest Investors: George Soros
Support More Investments in Ukraine
George Soros thinks that besides encouraging more direct foreign investment into the Ukrainian economy, the European Union could also offer training to local companies’ managers as a way of assisting them in honing their business strategies. An effective methodology of rolling out such kind of technical support would be to combine it with open lines of credit by European commercial banks.
Towards that kind of engagement, the European Bank for Reconstruction and Development (EBRD) could begin investing in companies together with local and foreign investors, as was the case in Central Europe. Under such an economic package or approach, Ukraine would be opening its domestic market to products assembled or produced by European companies’, while the European Union would be increasing the access by Ukrainian companies to wider markets and help them towards integration into the international economy.
Germany Must Take the Lead Role
In all these, Soros is hoping that under German leadership, Europe will live up to the occasion. Germany should accept the liabilities and responsibilities that come with being the dominant power in Europe. The truth is that Ukraine today needs what can be compared to a new era Marshall Plan, whereby this time, Germany would assume the role played by the United States in the reconstruction of Europe following World War II. Only this time, the beneficiary would be a single country being reconstructed, Ukraine.
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