George Soros: To survive, Europe must recapture spirit of solidarity
Europe has become divided into two classes – depressed debtors like Greece and controlling creditors like Germany. To reverse this, Europe must recapture its spirit of solidarity. A good place to start is where suffering is greatest, in Greece, among thousands of mistreated migrants.
The European Union used to be what psychologists call a “fantastic object,” a desirable goal that fires people’s imagination. I saw it as the embodiment of an open society – an association of nations that gave up part of their sovereignty for the common good and formed a union in which no nation would have a dominant position.Skip to next paragraph
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The euro crisis is now threatening to turn the European Union into something fundamentally different. The member countries are divided into two classes – creditors and debtors – with the creditors in charge. Germany, as the largest and most creditworthy country, occupies a dominant position. As a result of current policies, debtor countries pay substantial risk premiums for financing their debt, and this is reflected in their cost of financing in general. This has pushed the debtor countries into depression and put them at a substantial competitive disadvantage that threatens to become permanent.
This is the result not of a deliberate plan but of a series of policy mistakes. Germany did not seek to occupy a dominant position and is reluctant to accept the obligations and liabilities that it entails. I have called this the tragedy of the European Union.
Now, some recent developments give grounds for hope. The authorities are taking steps to correct their mistakes. I have in mind the June EU summit’s decision to form a banking union, and the EU Central Bank’s plan for unlimited intervention in government bond markets. Financial markets have been reassured that the euro is here to stay. This could be a turning point if it were reinforced by additional positive steps. Unfortunately, it has merely reinforced German resistance to further concessions.
A distinguishing feature of the tragedy I am talking about is that it feeds on hope. Germany is willing to do the minimum but nothing more to hold the euro together. That is how the eurozone becomes permanently divided between creditors and debtors.
This is such a dismal prospect that it must not be allowed to become reality. There must be a way to avoid it – after all, history is not predetermined. When the European Union was only an idea, a fantastic object, it was conceived as an instrument of solidarity. Today, Europe hangs together out of grim necessity. That is not conducive to a harmonious partnership. The only way to reverse this seemingly inexorable fate is to recapture the spirit of solidarity.
Since I am a fervent believer in the European Union as the embodiment of an open society, I have set up an Open Society Initiative for Europe – OSIFE for short – and I have been looking for ways to achieve this goal.
I realized that the best place to start would be where current policies have created the greatest human suffering. Clearly, that place is Greece. Within Greece, the fate of the many migrants and asylum seekers stuck there particularly resonated with me. Clearly, their plight cannot be separated from that of the Greeks themselves. An initiative confined to migrants would reinforce the hostility they face from some in the majority.