George Soros: The European Union is in an Existential Crisis

MarketWatch - As worries about Italy and Spain's governance whack European markets on Tuesday, George Soros is adding to the downbeat mood.

The 87-year-old Hungarian-American, known as the investor who broke the Bank of England, has offered the following bleak assessment in a speech in Paris to the European Council on Foreign Relations

The EU seems to have "lost its way" since the global financial crisis of 2008, he added. Officials in Brussels adopted a program of fiscal retrenchment that led to the euro crisis, and this transformed the eurozone into a relationship between creditors and debtors "that is neither voluntary nor equal," Soros said, according to his prepared remarks.

The trade bloc also has been buffeted by a 2015 refugee crisis that authorities failed to handle, as well as U.S. President Donald Trump's recent withdrawal from a nuclear deal with Iran, Soros said. European populist politicians have exploited resentments, and Italy is "now facing elections in the midst of political chaos," he said.

"The strength of the dollar is already precipitating a flight from emerging market currencies. We may be heading for another major financial crisis," he warned.

The controversial billionaire investor, known for his big donations to progressive causes, also offered possible solutions.

"Europe needs to do something drastic to escape it. It needs to reinvent itself," Soros said, as he expressed some approval for French leader Emmanuel Macron.

"That is what President Macron sought to initiate by proposing what he calls citizens' consultations. This initiative needs to be a genuinely grassroots effort."

Soros emphasized that many regular folks are fed up: "Ordinary people feel excluded and ignored. Now we need a...