George Soros doesn’t mince words. In the middle of the Eurozone debt crisis he was one of the biggest advocates for Eurobonds, even suggesting the EU would be better off if Germany would get out (or change course and start backing his proposals). This time that he’s warning that Europe needs to take decisive action to buttress Ukraine or it could find Putin’s Russia on its doorsteps in a couple of years.
“Europe is facing a challenge from Russia to its very existence. Neither the European leaders nor their citizens are fully aware of this challenge or know how best to deal with it,” Soros writes in the New York Review of Books.
Soros compares Putin to Hitler
Soros expects Putin to wait until the upcoming elections and then try to make a backroom deal of peace and gas in exchange for a prime minister more sympathetic to Russia, which President Poroshenko would likely turn down, prompting Putin to create his own land bridge to Crimea.
“The argument that has prevailed in both Europe and the United States is that Putin is no Hitler; by giving him everything he can reasonably ask for, he can be prevented from resorting to further use of force,” writes Soros, who disagrees. Even the title of his essay, Wake Up, Europe, is a sly nod to JFK’s book on the events that led to World War II, Why England Slept.
Soros’s proposals unlikely to gain traction
To support Ukraine, Soros wants an immediate $20 billion cash injection from the IMF to repair coal mines in the east, buy gas for winter, and shore up the country’s foreign currency reserves. In addition, he wants to setup a debt exchange that would swap Ukraine’s short-term, euro-denominated debt for longer term bonds at lower interest rates on a voluntary basis. The catch is that you could only entice bondholders to agree to the deal if the US or EU agreed to guarantee the new bonds. Of course, Soros and his fellow Eurobond advocates couldn’t persuade Germany to guarantee debt for other EU member states, and this proposal seems about as likely. Finally he wants a wholesale restructuring of Ukraine’s state-owned Naftogaz, which might be a great idea, but it’s hard to see why this falls on Europe to complete or how realistic it is until tensions with Russia are calmer.
The full article can be found here