Billionaire speculator cautions over job losses but says Europe could still be pulled apart by deflation and slow growth
Billionaire speculator George Soros on Wednesday waded into the political row about Britain's membership of the EU with a warning that a decision to quit would lead to an exodus of foreign-owned companies.
Soros said the argument for Britain remaining part of the EU could be summed up in one word – jobs – as he outlined his concerns that Europe could be pulled apart by decades of slow growth and Japanese-style deflation.
The man who helped to force the pound out of the exchange rate mechanism on Black Wednesday in 1992 stressed that Britain had the best of all worlds by being part of the EU but not the euro.
Asked about the potential consequences of Britain's withdrawal from the EU, Soros said: "I will leave it to the British business community, particularly the multinationals that set up factories here as an entry point into the common market, to explain to the public what they stand to lose. But in one word – jobs."
Soros, in London to publicise a new book – The Tragedy of the European Union – made his remarks after the Labour leader, Ed Miliband, won plaudits from business groups for playing down the chances of an in-out referendum should the opposition win next year's general election.
But despite his insistence that Britain would be damaged by leaving the EU, he expressed concerns that Europe might not survive a long period of stagnation. Blaming Germany for the EU's predicament, Soros said it was possible for a country such as Japan to cope with prolonged periods of stagnation, but not for an incomplete association of nations.
Soros said he had abandoned his idea that the euro should split into two – a stronger, northern euro led by Germany, and a weaker, southern euro led by France. Germany, he said, had ensured the future of the euro, but without solving any of the underlying problems.
"Germany did the minimum to ensure that [the euro's survival]. Unfortunately it was only the minimum.
"Germany has fulfilled my worst expectations. It has already transformed the EU from what it was meant to be – a voluntary association of equal and sovereign states that sacrificed part of their sovereignty the common good – into something radically different: a creditor-debtor relationship where the debtors have trouble meeting their obligations. That has created a two-tier Europe with two classes of members.
"The financial and economic policies Germany is advocating and imposing on Europe are the wrong policies. It is a counter-productive policy – austerity in a time of deflation."
He predicted dire consequences should any of the single currency's 18 members decide to leave the euro in favour of a go-it-alone strategy.
"If the euro disintegrated in a disorderly manner it would not have solved the problem, it would have created an even bigger problem – a real meltdown," Soros said. "The problems of the euro don't have a national solution. Leaving the euro is a disaster. It would mean defaulting on a country's debts. That would have very severe consequences for financial stability. It might be beyond the powers of the authorities to control."
He added: "The euro is a fragile union. Any country leaving the euro would create very serious problems, both for the country leaving and for the euro itself.
Soros described the crisis in Ukraine as a "wake-up call" to Europe – and called on the union to concentrate on doing what was best for the EU as a whole, rather than focusing on the needs of individual member states.
He said: "Ukrainians have effectively proven they are willing to sacrifice their lives to be closer to a Europe that is at the same time in the process of disintegration.
"Europe now faces this issue. Are they going to respond to the invasion of Crimea based on their narrow national interests, or are they going to act on a united basis representing the interests of the whole European Union?
"It is a challenge and I hope that Europe will respond to it and actually rediscover its original mission." Reported by guardian.co.uk 4 hours ago.
Billionaire speculator George Soros on Wednesday waded into the political row about Britain's membership of the EU with a warning that a decision to quit would lead to an exodus of foreign-owned companies.
Soros said the argument for Britain remaining part of the EU could be summed up in one word – jobs – as he outlined his concerns that Europe could be pulled apart by decades of slow growth and Japanese-style deflation.
The man who helped to force the pound out of the exchange rate mechanism on Black Wednesday in 1992 stressed that Britain had the best of all worlds by being part of the EU but not the euro.
Asked about the potential consequences of Britain's withdrawal from the EU, Soros said: "I will leave it to the British business community, particularly the multinationals that set up factories here as an entry point into the common market, to explain to the public what they stand to lose. But in one word – jobs."
Soros, in London to publicise a new book – The Tragedy of the European Union – made his remarks after the Labour leader, Ed Miliband, won plaudits from business groups for playing down the chances of an in-out referendum should the opposition win next year's general election.
But despite his insistence that Britain would be damaged by leaving the EU, he expressed concerns that Europe might not survive a long period of stagnation. Blaming Germany for the EU's predicament, Soros said it was possible for a country such as Japan to cope with prolonged periods of stagnation, but not for an incomplete association of nations.
Soros said he had abandoned his idea that the euro should split into two – a stronger, northern euro led by Germany, and a weaker, southern euro led by France. Germany, he said, had ensured the future of the euro, but without solving any of the underlying problems.
"Germany did the minimum to ensure that [the euro's survival]. Unfortunately it was only the minimum.
"Germany has fulfilled my worst expectations. It has already transformed the EU from what it was meant to be – a voluntary association of equal and sovereign states that sacrificed part of their sovereignty the common good – into something radically different: a creditor-debtor relationship where the debtors have trouble meeting their obligations. That has created a two-tier Europe with two classes of members.
"The financial and economic policies Germany is advocating and imposing on Europe are the wrong policies. It is a counter-productive policy – austerity in a time of deflation."
He predicted dire consequences should any of the single currency's 18 members decide to leave the euro in favour of a go-it-alone strategy.
"If the euro disintegrated in a disorderly manner it would not have solved the problem, it would have created an even bigger problem – a real meltdown," Soros said. "The problems of the euro don't have a national solution. Leaving the euro is a disaster. It would mean defaulting on a country's debts. That would have very severe consequences for financial stability. It might be beyond the powers of the authorities to control."
He added: "The euro is a fragile union. Any country leaving the euro would create very serious problems, both for the country leaving and for the euro itself.
Soros described the crisis in Ukraine as a "wake-up call" to Europe – and called on the union to concentrate on doing what was best for the EU as a whole, rather than focusing on the needs of individual member states.
He said: "Ukrainians have effectively proven they are willing to sacrifice their lives to be closer to a Europe that is at the same time in the process of disintegration.
"Europe now faces this issue. Are they going to respond to the invasion of Crimea based on their narrow national interests, or are they going to act on a united basis representing the interests of the whole European Union?
"It is a challenge and I hope that Europe will respond to it and actually rediscover its original mission." Reported by guardian.co.uk 4 hours ago.