George Soros Ukraine stated that the penalty enacted by the US and Europe on Russia because of its involvement in Ukraine has caused a lot of damage on the economy of Russia. The Russian banks and corporations were deprived of access to international capital markets. The loss has been worsened by the reduced oil prices. The low prices of oil have been a great challenge to the economy because of the inability to balance the budget, leading to a major financial crisis.
Soros advocates for reorientation of the existing guidelines of the European Union toward Russia and Ukraine. He argues for a two- prolonged tactic that balances the punishment against Russia with much help for Ukraine. The rebalancing would be effective in the beginning of 2015 because of several reasons.
According to Soros, sanctions are a compulsory evil since either the EU nor the US is ready to engage in war with Russia, making economic sanction as a way to resist Russian aggression. Soros emphasizes that the damage was bigger than expected. It is expected that Russia’s challenges and Ukraine’s progress would stimulate President Vladimir to give up on destabilizing Ukraine. It is unfortunate that the European public considers Ukraine as a country that only requires financial help and not essential to the stability of the euro like Greece.
George Soros confirms that, on the contrary, all the consequences of assisting Ukraine would be helpful. Assisting Ukraine to secure itself would directly aid Europe in protecting itself.
From Soros’ view, Ukraine is experiencing payment crisis, which transformed into a public debt and banking crisis. The global fiscal groups are not in a position to tackle the political aspects of the Ukrainian condition. To assist the Ukrainian economy, the European Union established an Association Agreement with Ukraine in 2007 and concluded in 2012. Ukraine has experienced a radical transformation, but the complicated bureaucratic processes of the European Commission do not permit that.
A New Policy to Rescue Ukraine
George Soros | Open Society Foundations (OSF)
According to Soros, Ukraine requires global assistance because it has faced challenges that have resulted in financial crisis. Recovering from the shock will enhance its ability to pay debts, and that was the reason IMF was tasked with offering financial help to Ukraine. Soros claims that the European institutions, such as the European Central Bank did not provide much assistance to Ukraine because it was not a member of the EU. Ukraine has had a bad history with the previous IMF programs hence, it was only offered help as a gift for strong proof of deep structural reform and not as an enticement to carry out the reforms.
Soros states that the birth on new Ukraine and the Russian violence are not just temporary blows but historic events. To substitute communism, President Putin has established a nationalist ideology centered on tribal grounds, social conservatism and religious faith. Putin’s strategy to recreate a Russian empire has aided in bringing into existence a new Ukraine opposed to Russia, which is different from the corrupt and unproductive old Ukraine.
Soros concludes that reformists in the new Ukraine government are in favor of an essential “big bang” reform program that will have a great impact by eradicating corruption and paying debts. He emphasizes that Europe should arise and realize that it is under attack from Russia and helping Ukraine should be considered a defense expenditure by the EU countries.
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