The politically active billionaire George Soros payed a visit to Brussels on October 22, promoting a new essay on the relations with Ukraine. His organization Open Society Foundations (OSF) has been active in Ukraine for decades – even before its independence – promoting civil society, democratic values and freedom of information. ‘I am a firm believer in an ever closer Union of like minded states and open society. The OSF has deep routs in Ukrainian society and I have been going a lot to the country.’

Europe has lost its way

Right now Soros is deeply worried that all this work has been for nothing, as Russia has invaded Ukraine and Europe is indecisive in really helping the eastern neighbours, with disastrous effects. ‘The EU has lost its way as a result of the financial crisis and its failure to fulfil its original mission let to dissatisfaction. And now Russia has emerged as an alternative to liberal democracy.’ Russia could be described, according to Soros, as a ‘maffia state, where you combine political dominance with financial exploitation.’ The country now is challenging Europe in Ukraine, ‘and no one in Europe really understands the challenge and the seriousness of what’s happening.’

‘The EU is an experiment in international governance, but a failing one, just like the UN. International law is more a concept than a reality. But still, the EU represents the rule of law, while Russia represents the use of force. Which expresses itself by repression at home and aggression abroad.’

How could Europe save Ukraine? The businessman and philanthropist sees the emergence of a ‘new Ukraine’ which is radically opposed to the old Ukraine, which was a maffia state under Yanukovich. ‘That new Ukraine is devoted to the original concept of Open Society and the EU.’ You might think that Soros is promoting his own organization but at Sunday’s general election in Ukraine, indeed the pro-European parties won the ballot. ‘These people are willing to die for a better future, a European future.’

How to steer away from the cliff

Supporting the new government is therefore important. But Soros also wants more financial backing for Ukraine, apart from smacking sanctions onto the Russians. In the aforementioned New York Book of Reviews essay he spells out how to help Ukraine steer away from the cliff, in short his measures boil down to these ones:

  1. The IMF/EU programme has to reassess the situation because of the continued fighting, the financial needs of Ukraine far exceed what was originally assessed. An incipient financial crisis looms. Ukraine needs an injection of additional 20 billion dollars. That is not an unattainable figure, says Soros.
  2. Bailing in sovereign bond holders would be terrible mistake, basically leading to a default, and would make it impossible to get financing for companies. Instead of that the EU/IMF should provide debt relief.
  3. The state-owned gas monopoly continues to be a source of enormous waste of gas and of dependence on Russian supplies. The new Ukrainian management would need an initial investment of like 10 billion, for instance to introduce meters for gas (right now, households cannot control temperature, they have to open their windows even mid-Winter). The gas company should bring costs in line with the market basically by cutting costs and limiting use. That would stimulate local gas production, Ukraine has its own gas supply under the ground which is not tapped into.

Putin has the upper hand

According to Soros, Putin is still winning the game. He basically ‘observed the abominable cease-fire’ while he could he just have moved into the country, creating a corridor stretching all the way from Russia to Transnistria. Putin probably is waiting for the effects of a cold harsh winter on Ukraine that will be starving out of gas, accelerating a financial collapse. And then he just picks up the pieces of the remainders of Ukraine. ‘Europe needs to prevent this.’

The Association Agreement that was agreed upon between the EU and Ukraine, will not resolve the situation. ‘We have to recognize the deficiencies of the EU as an international organization,’ explains Soros. ‘It is extremely rigid, has its own timetable, and expects reality to conform to the timetable. We have seen this with the eurocrisis and now with Russia.’ Rather, Europe sleepwalked into the Association Agreement, being utterly surprised when then-President Yanukovich refused to accept the proposal in 2013, as it had a lot of demands and gave little back to Ukraine. ‘It was not difficult for Putin to outpit it, and so he did.’

George Soros thinks that the EU shouldn’t be too intrusive into Russian interests and promote ‘regular commercial relations’ with Ukraine.’ But that is the long run. Right now the EU needs to stop President Putin as he ‘wants to destabilize all of Ukraine. If the country collapses or is neutralized then Europe will have to fend for itself. The geopolitical consequences would be far reaching. Europeans wake up! Our way of life is in danger.’