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The Case for Surge Funding
Project Syndicate, Feb 17, 2016
Important progress was made at the donors’ conference
for Syrian refugees convened in London on February 4.
But much more remains to be done. The international
community is still vastly underestimating what is needed
to support refugees both inside and outside the borders
of the !uropean "nion. To deal with the refugee crisis while putting the !"’s largely unused ### borrowing
capacity to better use re$uires a paradigm shift.
%ather than scraping together insufficient funds year
after year it is time to engage in &surge funding.'
Spending a large amount of money up front would be far
more effective than spending the same amount overseveral years. Frontloading the spending would allow us
to address the most dangerous conse$uences of the
crisis ( including anti)immigrant sentiment in receiving
countries and despondency and marginali*ation among
refugees ( more effectively. +a,ing large initial
investments would help tip the economic political and
social dynamics away from -enophobia and disaffectionand toward constructive outcomes that benefit refugees
and the recipient countries ali,e.
Surge funding has been used often to finance
immuni*ation campaigns. The International Finance
Facility for Immuni*ation IFFIm/ which borrows
against future government contributions to
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immuni*ation programs has raised billions of dollars
over the past several years to ensure that vaccination
campaigns are successful as soon as possible. In the long
run this is more effective than spending the sameamount of money in yearly installments. IFFIm provides
a convincing precedent for the current crisis.
# sudden large influ- of refugees can cause panic that
affects the general population the authorities and most
destructively the refugees themselves. The panic breeds
a false sense that refugees are a burden and a dangerresulting in e-pensive and counter)productive measures
li,e erecting fences and walls and concentrating refugees
into camps which in turn breeds frustration and
desperation among the refugees. If the global
community could fund large)scale concentrated
programs to address the problem the general public andthe refugees would be reassured.
# surge in spending is needed both in !urope and in
frontline states li,e 0ordan Lebanon and Tur,ey. The
necessary investments include an overhaul of the !"’s
asylum policy and improvement of its border controls.
In frontline states money is needed to provide refugees with formal employment opportunities health care and
education. If life for refugees is made tolerable in
frontline countries and they believe that an orderly
process is in place for gaining entry to !urope they are
more li,ely to wait their turn rather than rushing to
!urope and overwhelming the system. Similarly if the
refugee crisis can be brought under control the panic
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will subside and the !uropean public will be less prone
to support anti)migrant policies.
0ordan could provide a test case. # country of 1.2 millionpeople it is providing refuge to 3.1 million non)citi*ens
including .352 million Syrians and facing the influ- of
additional Syrians uprooted by %ussian bombing. #
combination of massive upfront direct financial
assistance enhanced trade preferences and temporary
debt relief is needed. # successful program for 0ordan
could demonstrate the international community’s ability to bring the refugee crisis under control opening the
way to similar programs for other frontline states
ad6usted on a case)by)case basis depending on local
conditions.
The approach suggested here would cost more than !"
member states can afford out of current budgets. #minimum of 748 billion 942 billion/ needs to be spent
annually in the ne-t :)2 years; but even larger amounts
would be 6ustified to bring the migration crisis under
control. In fact so far lac, of ade$uate financing is the
main obstacle to implementation of successful programs
in any of the frontline countries particularly in Tur,ey. billion/ other !" countries are running
deficits. =erman Finance +inister
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This enhances the merits of having recourse to the !"’s
largely unused ### credit. The migration crisis poses an
e-istential threat to the !". Indeed with the north
pitted against the south and the east confronting the west the !" is coming apart at the seams.
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Putin is a Bigger Threat to Euroe!s E"istence
than #sis
The $uardian, Feb 11, 2016
The leaders of the "S and the !" are ma,ing a grievous
error in thin,ing that president Aladimir utin’s %ussia
is a potential ally in the fight against Islamic State. The
evidence contradicts them. utin’s aim is to foster the
!"’s disintegration and the best way to do so is to flood
!urope with Syrian refugees.
%ussian planes have been bombing the civilian
population in southern Syria forcing them to flee to
0ordan and Lebanon. There are now 38888 Syrian
refugees camped out in the desert awaiting admission to
0ordan. # smaller number are waiting to enter Lebanon.
Both groups are growing.
%ussia has also launched a large)scale air attac, against
civilians in northern Syria. This was followed by a
ground assault by Syrian president Bashar al)#ssad’s
army against #leppo a city that used to have 3 million
inhabitants. The barrel bombs caused C8888 civilians
to flee to Tur,ey; the ground offensive could uproot
many more.
The families on the move may not stop in Tur,ey.
=erman chancellor #ngela +er,el flew to #n,ara this
wee, to ma,e last)minute arrangements with the
Tur,ish government to induce the refugees already in
Tur,ey to prolong their stay there. She offered to airlift
8/17/2019 Soros Essays
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388888):88888 Syrian refugees annually directly to
!urope on the condition that Tur,ey will prevent them
from going to =reece and will accept them bac, if they
do so.
utin is a gifted tactician but not a strategic thin,er.
There is no reason to believe he intervened in Syria in
order to aggravate the !uropean refugee crisis. Indeed
his intervention was a strategic blunder because it
embroiled him in a conflict with Tur,ey’s president
%ecep Tayyip !rdoDan which has hurt the interests of both.
But once utin saw the opportunity to hasten the !"’s
disintegration he sei*ed it. Ee has obfuscated his
actions by tal,ing of cooperating against a common
enemy Isis. Ee has followed a similar approach in
",raine signing the +ins, agreement but failing tocarry out its provisions.
It is hard to understand why "S and !" leaders ta,e
utin at his word rather than 6udging him by his
behaviour. The only e-planation I can find is that
democratic politicians see, to reassure their publics by
painting a more favourable picture than reality 6ustifies.The fact is that utin’s %ussia and the !" are engaged in
a race against time the $uestion is which one will
collapse first.
The utin regime faces ban,ruptcy in 38C when a large
part of its foreign debt matures and political turmoil
may erupt sooner than that. The president’s popularity
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which remains high rests on a social compact re$uiring
the government to deliver financial stability and a slowly
but steadily rising standard of living. and the subse$uent
rescue pac,ages for =reece the !" has learned how to
muddle through one crisis after another. But today it is
confronted by five or si- crises at the same time which
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may prove to be too much. #s +er,el correctly foresaw
the migration crisis has the potential to destroy it.
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The E% is on the &erge of Co''ase ( )n
#nter*ie+
The e+ -or. /e*ie+ of Boo.s, an 20, 2016
The following is a revised version of an interview
between George Soros and Gregor Peter Schmitz of the
German magazine
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not only in !urope but also in =ermany and even in her
own partyMis under attac,.
Schmitz +er,el used to be very cautious and deliberate.eople could trust her. But in the migration crisis she
acted impulsively and too, a big ris,. Eer leadership
style has changed and that ma,es people nervous.
Soros That’s true but I welcome the change. There is
plenty to be nervous about. #s she correctly predicted
the !" is on the verge of collapse. The =ree, crisistaught the !uropean authorities the art of muddling
through one crisis after another. This practice is
popularly ,nown as ,ic,ing the can down the road
although it would be more accurate to describe it as
,ic,ing a ball uphill so that it ,eeps rolling bac, down.
The !" now is confronted with not one but five or si-
crises at the same time.
Schmitz To be specific are you referring to =reece
%ussia ",raine the coming British referendum and the
migration crisis@
Soros es. #nd you haven’t even mentioned the root
cause of the migration crisis the conflict in Syria. Norhave you mentioned the unfortunate effect that the
terrorist attac,s in aris and elsewhere have had on
!uropean public opinion.
+er,el correctly foresaw the potential of the migration
crisis to destroy the !uropean "nion.
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badly needs fi-ing. This is a fact but it is not irreversible.
#nd the people who can stop +er,el’s dire prediction
from coming true are actually the =erman people. I
thin, the =ermans under the leadership of +er,el haveachieved a position of hegemony. But they achieved it
very cheaply. Normally hegemons have to loo, out not
only for their own interests but also for the interests of
those who are under their protection. Now it’s time for
=ermans to decide Ho they want to accept the
responsibilities and the liabilities involved in being the
dominant power in !urope@
Schmitz she was not
willing to allow the rescue of the !uropean ban,ing
system to be guaranteed on a !urope)wide basis becauseshe felt that the prevailing =erman public opinion would
be opposed to it. If she had tried to change public
opinion instead of following it the tragedy of the
!uropean "nion could have been avoided.
Schmitz But she wouldn’t have remained chancellor of
=ermany for ten years.
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Soros ou are right. She was very good at satisfying the
re$uirements and aspirations of a broad range of the
=erman public. She had the support of both those who
wanted to be good !uropeans and those who wanted herto protect =erman national interest. That was no mean
feat. She was reelected with an increased ma6ority. But
in the case of the migration issue she did act on
principle and she was willing to ris, her leadership
position. She deserves the support of those who share
her principles.
I ta,e this very personally. I am a strong supporter of the
values and principles of an open society because of my
personal history surviving the Eolocaust as a 0ew under
the Na*i occupation of Eungary. #nd I believe that she
shares those values because of her personal history
growing up under Kommunist rule in !ast =ermanyunder the influence of her father who was a pastor. That
ma,es me her supporter although we disagree on a
number of important issues.
Schmitz ou have been so involved in promoting the
principles of open society and supporting democratic
change in !astern !urope.
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ruling party in oland 0arosPaw Qac*yRs,i is ta,ing a
similar approach. Ee is not as intelligent as rbOn but
he is a canny politician and he chose migration as the
central issue of his campaign. oland is one of the mostethnically and religiously homogeneous countries in
!urope. # +uslim immigrant in Katholic oland is the
embodiment of the ther. Qac*yRs,i was successful in
painting him as the devil.
Schmitz +ore broadly how do you view the political
situation in oland and Eungary@
Soros #lthough Qac*yRs,i and rbOn are very different
people the regimes they intend to establish are very
similar. #s I have suggested they see, to e-ploit a mi- of
ethnic and religious nationalism in order to perpetuate
themselves in power. In a sense they are trying to
reestablish the ,ind of sham democracy that prevailed inthe period between the First and Second
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Qac*yRs,i’s oland are hostile to each other but they are
even more hostile to the principles on which the
!uropean "nion was founded.
Schmitz
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other fissures. Therefore the very survival of the !" is at
ris,.
Schmitz That’s an interesting point because Iremember that you used to be very critical of +er,el two
years ago for being too concerned with the interests of
her voters and establishing a =erman hegemony on the
cheap. Now she has really changed course on the
migration issue and opened the door wide to Syrian
refugees. That created a pull factor that in turn allowed
the !uropean authorities to develop an asylum policy with a generous target up to a million refugees a year
with the target open for several years. %efugees who are
$ualified to be admitted could be e-pected to stay where
they are until their turn comes.
Soros But we don’t have a !uropean asylum policy. The
!uropean authorities need to accept responsibility forthis. It has transformed this past year’s growing influ- of
refugees from a manageable problem into an acute
political crisis. !ach member state has selfishly focused
on its own interests often acting against the interests of
others. This has precipitated panic among asylum
see,ers the general public and the authoritiesresponsible for law and order. #sylum see,ers have been
the main victims. But you are right. +er,el deserves
credit for ma,ing a !uropean asylum policy possible.
The !" needs a comprehensive plan to respond to the
crisis one that reasserts effective governance over the
flows of asylum see,ers so that they ta,e place in a safeorderly way and at a pace that reflects !urope’s capacity
8/17/2019 Soros Essays
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to absorb them. To be comprehensive the plan has to
e-tend beyond the borders of !urope. It is less
disruptive and much less e-pensive for potential asylum
see,ers to stay in or close to their present location.
+y foundation developed a si-)point plan on this basis
and announced it at e-actly the same time as rbOn
introduced his si-)point plan but the two plans were
diametrically opposed to each other. rbOn’s plan was
designed to protect the national borders against the
asylum see,ers; ours sought to protect the asylumsee,ers.
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Soros In Eungary he has won hands down. +ore
disturbingly he is also winning in !urope. Ee is
challenging +er,el for the leadership of !urope. Ee
launched his campaign at the party conference inSeptember 382 of the Khristian Social "nion of Bavaria
the sister party of +er,el’s Khristian Hemocratic
"nion/ and he did so in cahoots with Eorst Seehofer the
=erman party chairman. #nd it is a very real challenge.
It attac,s the values and principles on which the
!uropean "nion was founded. rbOn attac,s them from
the inside; utin from the outside. Both of them are
trying to reverse the subordination of national
sovereignty to a supranational !uropean order.
utin goes even further he wants to replace the rule of
law with the rule of force. They are har,ing bac, to a
bygone age. Fortunately +er,el has ta,en the challengeseriously. She is fighting bac, and I support her not only
with words but also with deeds. +y foundations do not
engage only in advocacy; they see, to ma,e a positive
contribution on the ground.
8/17/2019 Soros Essays
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largely untapped ### borrowing capacity. The burden
of servicing the bonds could be e$uitably distributed
between member states that accept refugees and those
that refuse to do so or impose special restrictions.Needless to say that is where I remain at odds with
Khancellor +er,el.
Schmitz ou have retired from running your hedge fund
and devote all your energies to your foundation.
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family and many others/. Ee taught me that it’s much
better to face harsh reality than to close your eyes to it.
nce you are aware of the dangers your chances of
survival are much better if you ta,e some ris,s than if you mee,ly follow the crowd. That is why I trained
myself to loo, at the dar, side. It has served me well in
the financial mar,ets and it is guiding me now in my
political philanthropy. #s long as I can find a winning
strategy however tenuous I don’t give up. In danger lies
opportunity. It’s always dar,est before dawn.
Schmitz
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Schmitz Eow concerned are you that in the middle of all
these crises an important !" member state such as the
"Q is considering leaving the !uropean "nion@
Soros Aery. I am convinced that Britain should stay in
!urope not only for economic but even more for political
reasons. #n !" without the "Q would be a much wea,er
union.
Schmitz But surveys show a British ma6ority for a
Bre-it or British e-it from the !".
Soros The campaign for the Bre-it has deliberately
misled the public. Kurrently Britain has the best of all
possible deals with !urope. It has access to the common
mar,et where nearly half of "Q e-ports go while it is not
weighed down by the burden of having 6oined the
euro*one.
Schmitz
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than to be part of it. The campaign had the field to itself
because the government wanted to give the impression
that it is holding out for the best deal.
Schmitz For a long time !uropeMand the worldMcould
count on Khina as a growth and credit engine.
Soros Khina is still historically the most important
country. It still has very large accumulated foreign
currency reserves.
Schmitz #nd that will shelter the country@
Soros Khina is e-hausting these reserves very rapidly. It
also has an incredibly large reservoir of trust from the
Khinese population many people may not understand
how the Khinese regime actually wor,s but they believe
that a regime that has managed to overcome so many
problems ,nows what it is doing. But the reservoir of
trust is also being e-hausted at a remar,ably fast rate
because the leadership has made many mista,es.
resident i 0inping can carry on with his current
policies for another three years or so but during that
time Khina will e-ert a negative influence on the rest of
the world by reinforcing the deflationary tendencies thatare already prevalent. Khina is responsible for a larger
share of the world economy than ever before and the
problems it faces have never been more intractable.
Schmitz Kan resident i rise to the challenge@
Soros There is a fundamental flaw in i’s approach. Ee
has ta,en direct control of the economy and of security.
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If he were to succeed in a mar,et)oriented solution it
would be much better for the world and for Khina. But
you cannot have a mar,et solution without some
political changes. ou cannot fight corruption withoutindependent media. #nd that’s one thing that i is not
willing to allow. n that point he is closer to utin’s
%ussia than to our ideal of an open society.
Schmitz
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for recapturing the spirit of solidarity that characteri*ed
the !uropean "nion in its early days.
Schmitz +any critici*e "S resident Barac, bama for being too wea, toward %ussia.
Soros %ightly so. utin is a supreme tactician who
entered the Syrian conflict because he saw an
opportunity to improve %ussia’s standing in the world.
Ee was ready to ,eep pushing until he encountered
serious resistance. resident bama should havechallenged him earlier. If bama had declared a no)fly
*one over Syria when %ussia started to supply military
e$uipment on a large scale %ussia would have been
obliged to respect it. But bama was eager to avoid any
chance of a direct military confrontation with %ussia. So
%ussia installed antiaircraft missiles and the "S had to
share control of the s,ies over Syria with %ussia. oucould almost say that by shooting down a %ussian
fighter 6et Tur,ish president %ecep Tayyip !rdoDan did
bama a favor. utin had to recogni*e that his military
adventure had run into serious opposition and he now
seems ready for a political solution. That is promising.
There is also ISIS and the terrorist attac,s that threatento undermine the values and principles of our
civili*ation. The terrorists want to convince +uslim
youth that there is no alternative to terrorism and if we
listen to the li,es of Honald Trump they will succeed.
Schmitz I can’t help but as,. Ho you ,now Trump@
8/17/2019 Soros Essays
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Soros =oing bac, many years Honald Trump wanted
me to be the lead tenant in one of his early buildings. Ee
said &I want you to come into the building. ou name
your price.' +y answer was &I’m afraid I can’t afford it.' #nd I turned him down.
The Terrorists and eagogues 3ant us to be
Scared4 3e 5ustn!t $i*e #n4
The $uardian, ec 2, 201
pen societies are always endangered. This is especially
true of #merica and !urope today as a result of
the terrorist attac,s in aris and elsewhere and the way
that #merica and !urope particularly France have
reacted to them.
0ihadi terrorist groups such as Islamic State and al)
Jaida have discovered the achilles heel of our western
societies the fear of death. Through horrific attac,s and
macabre videos the publicists of Isis magnify this fear
leading otherwise sensible people in hitherto open
societies to abandon their reason.
Scientists have discovered that emotion is an essential
component of human reasoning. That discovery e-plains
why 6ihadi terrorism poses such a potent threat to our
societies the fear of death leads us and our leaders to
thin, ( and then behave ( irrationally.
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Science merely confirms what e-perience has long
shown when we are afraid for our lives emotions ta,e
hold of our thoughts and actions and we find it difficult
to ma,e rational 6udgments. Fear activates an oldermore primitive part of the brain than that which
formulates and sustains the abstract values and
principles of open society.
The open society is thus always at ris, from the threat
posed by our response to fear. # generation that has
inherited an open society from its parents will notunderstand what is re$uired to maintain it until it has
been tested and learns to ,eep fear from corrupting
reason. 0ihadi terrorism is only the latest e-ample. The
fear of nuclear war tested the last generation and the
fear of communism and fascism tested my generation.
The 6ihadi terrorists’ ultimate goal is to convince +uslim youth worldwide that there is no alternative to
terrorism. #nd terrorist attac,s are the way to achieve
that goal because the fear of death will awa,en and
magnify the latent anti)+uslim sentiments in !urope
and #merica inducing the non)+uslim population to
treat all +uslims as potential attac,ers. #nd that is e-actly what is happening. The hysterical
anti)+uslim reaction to terrorism is generating fear and
resentment among +uslims living in !urope and
#merica. The older generation reacts with fear the
younger one with resentment; the result is a breeding
ground for potential terrorists. This is a mutuallyreinforcing refle-ive process.
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Eow can it be stopped and reversed@ #bandoning the
values and principles underlying open societies and
giving in to an anti)+uslim impulse dictated by fear
certainly is not the answer though it may be difficult toresist the temptation. I e-perienced this personally when
I watched the last %epublican presidential debate; I
could stop myself only by remembering that it must be
irrational to follow the wishes of your enemies.
To remove the danger posed by 6ihadi terrorism
abstract arguments are not enough; we need a strategyfor defeating it. The challenge is underscored by the fact
that the 6ihadi phenomenon has been with us for more
than a generation. Indeed gaining a proper
understanding of it may be impossible. But the attempt
must be made.
Konsider the Syrian conflict which is the root cause ofthe migration problem that is posing an e-istential
threat to the !uropean "nion as we ,now it. If it was
resolved the world would be in better shape. It is
important to recognise that Isis is operating from a
position of wea,ness.
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crystal clear it is an egregious mista,e to do what the
terrorists want us to do. That is why as 385 gets
underway we must reaffirm our commitment to the
principles of open society and resist the siren song of theli,es of Honald Trump and Ted Kru* however hard that
may be.