Photo Credit: Niccolò Caranti
George Soros

The following is an unoficial translation of segments from an early January interview by Gregor Peter Schmitz of billionaire George Soros in WirtschaftsWoche, titled “Europa? Gibt’s doch nicht mehr.” OK, that’s not a fun concept, especially because of the museums and the cafés and romantic walks along the Seine. But Soros is a man who eats national economies for breakfast (sometimes literally), so when he talks, we pay attention.

Gregor Peter Schmitz: When Time magazine put German Chancellor Angela Merkel on its cover, it called her the Chancellor of the Free World. Do you think it was justified?

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George Soros: Yes. As you know, I have been critical of the chancellor in the past and I remain very critical of her austerity policy. But after Russian President Vladimir Putin attacked Ukraine, she became the leader of the European Union and therefore, indirectly, of the Free World. Until then, she was a gifted politician who could read the mood of the public and cater to it. But in resisting Russian aggression, she became a leader who stuck her neck out in opposition to prevailing opinion.

She was perhaps even more farsighted when she recognized that the migration crisis had the potential to destroy the European Union, first by causing a breakdown of the Schengen system of open borders and, eventually, by undermining the common market. She took a bold initiative to change the attitude of the public. Unfortunately, the plan was not prepared properly. The crisis is far from resolved and her leadership position—not only in Europe but also in Germany and even in her own party—is under attack.

Schmitz: Merkel used to be very cautious and deliberate. People could trust her. But in the migration crisis she acted impulsively and took a big risk. Her leadership style has changed and that makes people nervous.

Soros: That’s true, but I welcome the change. There’s plenty to be nervous about. As she correctly predicted, the EU is on the verge of collapse. The Greek crisis taught the European authorities the art of muddling through one crisis after another. This practice is popularly known as kicking the can down the road, although it would be more accurate to describe it as kicking a ball uphill so that it keeps rolling back down. The EU now is confronted with not one but five or six crises at the same time.

Schmitz: To be specific, are you referring to Greece, Russia, Ukraine, the coming British referendum, and the migration crisis?

Soros: Yes. And you haven’t even mentioned the root cause of the migration crisis: the conflict in Syria. Nor have you mentioned the unfortunate effect that the terrorist attacks in Paris and elsewhere have had on European public opinion.

Merkel correctly foresaw the potential of the migration crisis to destroy the European Union. What was a prediction has become the reality. The European Union badly needs fixing. This is a fact but it is not irreversible. And the people who can stop Merkel’s dire prediction from coming true are actually the German people.

I think the Germans, under the leadership of Merkel, have achieved a position of hegemony. But they achieved it very cheaply. Normally hegemonies have to look out not only for their own interests, but also for the interests of those who are under their protection. Now it’s time for Germans to decide: Do they want to accept the responsibilities and the liabilities involved in being the dominant power in Europe?

Schmitz: Would you say that Merkel’s leadership in the refugee crisis is different from her leadership in the euro crisis? Do you think she’s more willing for Germany to become a benevolent hegemony?

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