Soros warns of EU disintegration
25 June 2016
- From the section Business
Billionaire investor George Soros has warned that Britain’s vote to leave the European Union makes the disintegration of the bloc “practically irreversible”.
However, he called for thorough reconstruction of the EU in an attempt to save it.
Before Thursday’s UK referendum, Mr Soros had warned of financial meltdown if Britain voted to leave.
In his latest comments, he said the effects of the decision would damage Britain.
“Britain eventually may or may not be relatively better off than other countries by leaving the EU, but its economy and people stand to suffer significantly in the short- to medium term,” he wrote on the Project Syndicate website.
Mr Soros made huge profits in 1992’s “Black Wednesday” by betting against the British pound as it crashed out of the European Exchange Rate Mechanism.
Before Friday’s vote he warned of a similar meltdown, predicting a Brexit victory would send the pound down by 15-20%. In the event, sterling fell about 10% to a 31-year low.
“Now the catastrophic scenario that many feared has materialised, making the disintegration of the EU practically irreversible,” wrote Mr Soros in his latest article.
“The financial markets worldwide are likely to remain in turmoil as the long, complicated process of political and economic divorce from the EU is negotiated.”
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He said the consequences for the economy would be comparable to the financial crisis of 2007-2008.
“After Brexit, all of us who believe in the values and principles that the EU was designed to uphold must band together to save it by thoroughly reconstructing it,” he wrote.
“I am convinced that as the consequences of Brexit unfold in the weeks and months ahead, more and more people will join us.”
What comes next?
What is Article 50 of the EU Treaty?
- In force since 2009 but never tested
- Allows governments to notify intent to leave. Talks then begin on a range of issues between the leaving nation and other EU members
- If no deal is reached, membership will automatically cease two years after notification
- The article is only a basic template for leaving, settling the date and some other matters. It does not automatically include issues such as movement of people or trade. The latter could take years to conclude
This post was written by FSB News