A campaign to secure a second Brexit referendum within a year and save the UK from “immense damage” is to be launched in days, the philanthropist and financier George Soros has announced.
The billionaire founder of Open Europe said the prospect of the UK’s prolonged divorce from Brussels could help persuade the British public by a “convincing margin” that EU membership was in their interests.
In a speech on Tuesday ahead of the launch of the manifesto for the Best for Britain campaign – said to have already attracted millions of pounds in donations – Soros suggested to an audience in Paris that changing the minds of Britons would be in keeping with “revolutionary times”.
Best for Britain had already helped to convince parliamentarians to extract from Theresa May a meaningful vote on the final withdrawal deal, he said, and it was now time to engage with voters, and Brussels, to pave the way for the UK to stay in the bloc.
Soros, 87, said: “Brexit is an immensely damaging process, harmful to both sides … Divorce will be a long process, probably taking more than five years. Five years is an eternity in politics, especially in revolutionary times like the present.
“Ultimately, it’s up to the British people to decide what they want to do. It would be better however if they came to a decision sooner rather than later. That’s the goal of an initiative called the Best for Britain, which I support.
“Best for Britain fought for, and helped to win, a meaningful parliamentary vote which includes the option of not leaving at all. This would be good for Britain but would also render Europe a great service by rescinding Brexit and not creating a hard-to-fill hole in the European budget.
“But the British public must express its support by a convincing margin in order to be taken seriously by Europe. That’s what Best for Britain is aiming for by engaging the electorate. It will publish its manifesto in the next few days.”
Soros said he feared the EU could be heading towards another major financial crisis triggered by austerity and populist political parties intent on blowing the bloc apart.
Sounding the alarm as financial markets fell into turmoil on Tuesday amid a deepening political crisis in Italy, Soros said the EU had lost its way since the 2008 banking crash and required radical transformation in order to survive.
“The EU is in an existential crisis. Everything that could go wrong has gone wrong,” he said.
However, Soros said he was convinced it was the ideal time for the EU to reform itself and prepare the ground for the UK staying inside the bloc.
“The economic case for remaining a member of the EU is strong, but it will take time for it to sink in,” Soros said. “During that time the EU needs to transform itself into an association that countries like Britain would want to join, in order to strengthen the political case.
Sign up to the daily Business Today email or follow Guardian Business on Twitter at @BusinessDesk
“Such a Europe would differ from the current arrangements in two key respects. First, it would clearly distinguish between the European Union and the eurozone. Second, it would recognise that the euro has many unresolved problems and they must not be allowed to destroy the European Union.”
Italian bonds dropped sharply on Tuesday, pushing the country’s borrowing costs to the highest levels in more than four years as concerns grew that the EU’s third-largest economy could exit the single currency.
Sergio Mattarella, the country’s president, vetoed the appointment of a Eurosceptic as finance minister over the weekend, laying the ground for fresh elections later this year.
The Hungarian-born investor said an “addiction to austerity” at the heart of Europe was harming economic development, which had in turn been exploited by populist politicians to stoke anti-EU support.
Staying in the single market and customs union
The UK could sign up to all the EU’s rules and regulations, staying in the single market – which provides free movement of goods, services and people – and the customs union, in which EU members agree tariffs on external states. Freedom of movement would continue and the UK would keep paying into the Brussels pot. We would continue to have unfettered access to EU trade, but the pledge to “take back control” of laws, borders and money would not have been fulfilled. This is an unlikely outcome and one that may be possible only by reversing the Brexit decision, after a second referendum or election.
The Norway model
Britain could follow Norway, which is in the single market, is subject to freedom of movement rules and pays a fee to Brussels – but is outside the customs union. That combination would tie Britain to EU regulations but allow it to sign trade deals of its own. A “Norway-minus” deal is more likely. That would see the UK leave the single market and customs union and end free movement of people. But Britain would align its rules and regulations with Brussels, hoping this would allow a greater degree of market access. The UK would still be subject to EU rules.
The Canada deal
A comprehensive trade deal like the one handed to Canada would help British traders, as it would lower or eliminate tariffs. But there would be little on offer for the UK services industry. It is a bad outcome for financial services. Such a deal would leave Britain free to diverge from EU rules and regulations but that in turn would lead to border checks and the rise of other “non-tariff barriers” to trade. It would leave Britain free to forge new trade deals with other nations. Many in Brussels see this as a likely outcome, based on Theresa May’s direction so far.
Britain leaves with no trade deal, meaning that all trade is governed by World Trade Organization rules. Tariffs would be high, queues at the border long and the Irish border issue severe. In the short term, British aircraft might be unable to fly to some European destinations. The UK would quickly need to establish bilateral agreements to deal with the consequences, but the country would be free to take whatever future direction it wishes. It may need to deregulate to attract international business – a very different future and a lot of disruption.
“As a result [of austerity], many young people today regard the EU as an enemy that has deprived them of jobs and a secure and promising future,” he said.
Soros said there were still steps that could be taken to make the EU more appealing to ordinary voters who had been let down by Brussels since 2008.
Calling for an EU-funded Marshall-style plan for Africa worth about €30bn (£26bn) a year, he said migratory pressures across Europe could be relieved by helping developing nations. He called for the EU to abandon rules requiring member states to join the euro, lest they eventually combine with other EU rules to “destroy” the project altogether.
Echoing a call made by David Cameron before the Brexit vote, he argued for the EU to allow member states to pursue “multi-track” relations with the bloc, rather than “ever closer union”.
“Europe needs to do something drastic in order to survive its existential crisis. Simply put, the EU needs to reinvent itself,” he said.