Soros: EU facing major financial crisis, but I've a plan to save Europe

A surging dollar and capital flight from emerging markets may lead to another “major” financial crisis, veteran investor George Soros has warned the EU.

Speaking in Paris on Tuesday at a meeting organized by think tank the European Council on Foreign Relations, he said that the European Union is facing an imminent existential threat.

“Everything that could go wrong has gone wrong,” he said, adding: “It is no longer a figure of speech to say that Europe is in existential danger; it is the harsh reality.”

Refugees, territorial disintegration and an austerity policy are the three major challenges for the EU, according to Soros. The “addiction to austerity” by the EU had harmed the euro and was worsening the European crisis, he said.

The billionaire added that the “termination” of the nuclear deal with Iran and the “destruction” of the transatlantic alliance between the EU and the US are “bound to have a negative effect on the European economy and cause other dislocations,” including a devaluation of emerging-market currencies. “We may be heading for another major financial crisis.”

The EU needs to “transform itself into an association that countries like Britain would want to join, in order to strengthen the political case,” said the businessman.

This could be achieved if there’s a clear differentiation between the EU and the eurozone, Soros noted, adding that the bloc should recognize that certain problems exist with the euro currency. It should also repeal “outdated” legislation and not make countries outside of the eurozone feel inferior.

The investor suggested that an EU-funded Marshall Plan for Africa, worth about €30 billion ($35 billion) a year, could be the remedy for some of the ills facing Europe, while it would ease migratory pressures to the continent.

Soros also proposed a radical transformation of the EU, including the abandonment of the clause forcing its member states to join the single currency.

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