George Soros Explains the ‘Surge’ Fund Solution to Europe’s Refugee Crisis

George Soros a well renowned investor, author and philanthropist has written an essay that details the refugee crisis in Europe and the measures that EU should take to contain the situation.

The Refugee Crisis

Civil war and terror in 2015 caused over a million people to seek asylum in Europe from Middle East and Africa. Right now the situation is even more desperate. George Soros wrote that “Asylum seekers are desperate”, he urged that the refugees should be allowed to attain asylum in the places that they prefer.

Soros advised that the only way European Union can survive and contain this situation is by quickly getting great amount of cash to fix the crisis. In an article published in CNBC on http://www.nybooks.com/contributors/george-soros/, Soros said, “EU leaders need to embrace the idea that effectively addressing the crisis will require ‘surge’ funding, rather than scraping together insufficient funds year after year.” Soros estimated that an amount of $34 billion (30 billion Euros) will be needed per year.

The refugee crisis if not contained will cause failure of the Schengen system. Failure of this system will affect the trading and economy of the 26 member countries.

George Soros calculated the number of refugees that Europe can comfortably receive per year to be between 300,000 and 500,000. This regulated number will have two benefits. First, the refugees will be assured of getting asylum in countries that they seek. Secondly, the governments of the various countries will be able to plan for the refugees and make proper provisions for them.

EU’s Available Sources for the “Surge” Fund
Having set the amount, Soros went ahead to point out the different mechanisms that EU can use to get the “surge” funds. The tax revenue should be increased in all EU countries. But since, the move will face objections from various members on http://www.nytimes.com/topic/person/george-soros; the European Commission’s Multiannual Financial Framework should be employed. This forum is concerned with the long term spending plan of the countries and it can fairly increase the VAT values. Soros pointed out that while this method was effective; it lacks the ability to create great funds quickly.

Soros assured that EU has the ability to create the “surge” funds urgently. The union should make use of the unused $68 billion funds from the Balance of Payments Assistance Facility and the Financial Stabilization Mechanism (EFSF). The ability of the financial entities (EFSF and ESM) to leverage easy credit terms should be used. George Soros further advised that now is the time for EU to use their triple-A credit. The refugee crisis is a national emergency and as such EU should use the latter mechanism to acquire funds.

George Soros

He is listed among the top riches people in the world. He is the founder of Soros Fund Management which is a very successful investment management firm. He is also the founder of Open Society Foundation which supports charity activities around the world. He has written various important articles. He has dual citizenship in U.S. and Hungary.