A plan by billionaire investor George Soros for massive European economic assistance to Ukraine has no chance of working under the current circumstances, Forbes said.
Soros recently wrote an essay for the New York Review of Books in which he called on Europe to spend $50 billion bailing out the country. He argued that Europeans need to realize that Ukraine isn’t just another emerging market and that their future depends on the success of Kiev’s current reform-minded government, the website said.
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When he was a young man, Soros had to flee his native Hungary to escape the Soviet-backed communist regime. Given this personal history, Soros’ wariness of the threat posed by Russian revanchism, if a bit overheated, is perfectly understandable. Even if you disagree with his thesis about the “threat” posed by Russia, Soros quite unambiguously argues that Russia’s current regime presents far and away the greatest security risk to Europe, so one can easily understand where he is coming from, Forbes said.
But Soros doesn’t just want to make Moscow “pay a price, ” he argues that it’s not enough for the European Union to simply punish the Russians. Rather, there is an urgent need to actually aid the Ukrainians and to prevent popular living standards from collapsing any further, according to the website.
But despite his evident passion for the topic, Soros failed to confront the single most obvious obstacle that a “Marshall Plan for Ukraine” will face: opposition from the German government. Angela Merkel, you might recall, has been extremely consistent in advocating fiscal austerity. Germany has driven extremely hard bargains with Greece, Spain, and other economically unstable members of the European Union, basically insisting that economic reform pays for itself and that there is no need to “subsidize” the implementation of laws that should be enacted anyway, Forbes said.
The idea that Germany would countenance a $50 billion check to a government that, for all of the positive press it has received, is actually moving rather slowly on economic reform simply does not comport with political reality. Indeed, at the present time, Germany is barely willing to spend money on its own government, the website said.
There’s no indication that Russian actions in Ukraine have made the German government willing to undertake a radical departure from its previous policies, no sign whatsoever that Merkel and her advisers are preparing to sign over to Kiev what amounts to a giant blank check. On this one question, the EU has been entirely consistent: from the very beginning of the negotiating process, it was made abundantly clear to Kiev that no meaningful financial assistance would be forthcoming and that no one would underwrite the painful reforms necessary for integration with Europe, Forbes said.
Whether Soros is right or wrong, and there are reasons to be skeptical that his plan would actually work, is ultimately irrelevant: Ukraine isn’t going to get $50 billion. Indeed it will be lucky to get just enough money to prevent a messy default on its sovereign debt obligations, and even that much is currently in doubt. In the world we live in, there is no political will in Europe to sign away such massive sums of money to a country that many voters view as irrelevant. And if the events of the past twelve months haven’t changed that calculus, it’s unlikely to shift in the future, the website said.
