George Soros: Urgent Call for Europe to Bailout the Ukraine

Just a few days ago we published this blog article which talked about how the situation in the Ukraine was coming to a head in early 2015. It looks like George Soros senses the same thing. In this CNBC article he is quoted as saying there is an urgent need for Europe to bailout the Ukraine quickly or else Russia will win the perception battle. 

You have to feel for citizens in the Ukraine who have already suffered greatly and seem like pawns in a giant chess game between Russia and the West. Below some quotes from the CNBC article and then a few comments.

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"Billionaire investor George Soros has called on European officials to urgently boost their efforts to support the Ukrainian economy, to help contend with the threat posed by Russia to the European economy."

"Soros, who is Hungarian by birth, stated Europe needs to "wake up" and recognize that it is under attack from Russia, and argues that Ukraine's economy is more important to the bloc than the current political uncertainty being faced in member countries like Greece, in a new essay in the New York Review of Books this week."

"(There is) an urgent need to reorient the current policies of the European Union toward Russia and Ukraine. I have been arguing for a two-pronged approach that balances the sanctions against Russia with assistance for Ukraine on a much larger scale. This rebalancing needs to be carried out in the first quarter of 2015," he wrote in the essay, which was formally published late Wednesday."

After talking about how the sanctions and falling oil prices have severely hurt Russia more quickly than expected, the article goes on to say:

"Soros argued that the damage done to Russia has been faster and deeper than anyone could have expected and added that it would not be surprising if the crisis ended up with a default for the country."

"Coming on top of worldwide deflationary pressures that are particularly acute in the euro area and rising military conflicts such as the one with ISIS, a Russian default could cause considerable disruption in the global financial system, with the euro area being particularly vulnerable," he noted. 

. . . . . .

"Soros argued that more financial aid for Ukraine could help it become a "land of promise" that would not allow Putin to blame Russia's troubles on Western nations."

"Under this scenario, Putin would be seen as clearly responsible for the turmoil to Russia and he would either have to change course or try to stay in power by brutal repression, Soros argued."

"If he fell from power, an economic and political reformer would be likely to succeed him. Either way, Putin's Russia would cease to be a potent threat to Europe," he added."

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My added comments:

These comments by George Soros should get our attention. We have already noted that the situation in the Ukraine appears to be urgent and that it will provide an early clue in 2015 as to how the ongoing conflict between the US and Russia is going. We also linked to an article in the Russian media source Sputnik News that talked about how Russia could use a default on $600 Billion in debt to cause havoc in Europe and the global financial system. These comments by Soros confirm all these are very real problems and that there is a sense of urgency to the situation. 

The other thing that jumps out at you is how it seems like the Ukraine is viewed as just a pawn in the game. Soros seems more concerned about how to get rid of Putin by using western aid to the Ukraine to make sure "Putin would be seen as clearly responsible for the turmoil to Russia" than he does about what happens to the people of the Ukraine. They are caught in the middle of this power struggle.

He also makes it clear that the west seems serious about insuring that Putin "falls from power". This whole situation needs to  be watched very carefully. There is no indication whatsover that Putin intends to be pushed out of power without a major fight. As we noted in our earlier blog article, Russia appears ready to dig in for the long haul. There is no way of predicting how they will react to efforts to get Putin to "fall from power". Soros comments suggest this is a very real threat to the entire global financial system and to peace in the world.  We will follow it here to see how it goes from here.

added note: Here is another in depth article from Barron's on Soros comments.

And here is a link to the full article written by Soros.