Lecture Notes: Conversation with George Soros

Introduction

• Speaker: Mabel Fauna Vanya, former co-chair of ECFR.
• Guest: George Soros, significant role in ECFR's creation.
• Highlights of George Soros:
  • Recognized the 2008 economic crisis early.
  • Advocated for criminal justice reform in the U.S. for over 20 years.
  • Stands up for underdogs in Europe.

George Soros' Key Points

Revolutionary Times

• Current era described as a 'revolution of mystery'.
• Unprecedented events becoming possible and happening.
• Developed a framework based on malleability and effectivity.

Global Crisis

• January realization: global crisis indicating a shift in history.
• Countries more focused on conflicts than climate change.
• COVID-19 pandemic further disrupting global life.

Open Society Foundations

• Strategies to improve world conditions in development.
• Focus on International Monetary Fund (IMF) and Special Drawing Rights (SDRs).

Special Drawing Rights (SDRs)

• SDRs: synthetic money by IMF, allocated based on country's IMF shareholding.
• Rich countries urged to donate SDRs to poorer countries.

Perpetual Bonds Proposal

• Aim: Raise funds by issuing perpetual bonds (consols).
• Benefits:
  • Principal never repaid, only annual interest.
  • Cost-effective; 1 trillion euros costs 5 billion annually at 0.5% interest.
  • Immediate issuance possible upon EU member state authorization.
  • Bonds issued in tranches, attracting long-term investors.

Challenges and Considerations

• Legal and Moral Objections:
  • EU rules may not account for consoles.
  • Moral objections, particularly from German-speaking regions.
• Potential for Abuse:
  • Possible misuse in non-crisis times, though designed for temporary use.

Current State of EU Financial Strategy

• Reliance on budget over generation methods.
• Need to focus on generating funds, not just distributing.
• Urgency in issuing consoles to meet immediate needs.

Role of German Presidency

• German presidency starting July 1st, an opportunity for progress.
• Chancellor Merkel’s influence and support crucial.

Climate Change and Consols

• Movement to increase climate targets from 40% to 55%.
• Additional funds needed for European countries to meet the new target.
• Consols as a financial tool to address climate change and pandemic challenges.

Conclusion

• European Union's potential to address major challenges through financial innovation.
• Consols seen as essential to achieving these goals.