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George Soros: Europe must stand up to Hungary and Poland

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In new a Project Syndicate article, George Soros argues that Viktor Orbán is using COVID-19 to amend the constitution and electoral law, entrenching himself as prime minister for life.  

Hungary and Poland’s veto of the EU budget and coronavirus recovery plan could be circumvented, according to financier and philanthropist George Soros.  In an article published today on the Project Syndicate website, Europe Must Stand Up to Hungary and Poland,  he argues that if there is no agreement on a new EU budget, the old budget which expires at the end of 2020, could be extended on a yearly basis.  In this scenario, Poland and Hungary would risk not receiving any payments under new rule of law conditions agreed in July.

Soros also backs Guy Verhofstadt MEP’s proposal that the €750 billion recovery fund could be implemented by using an “enhanced co-operation procedure”.  However, “the question is whether the EU, with Chancellor Merkel perhaps leading the way, can muster the political will”.   He argues that the EU “can’t afford to compromise on the rule-of-law provisions”.  How it responds to Orbán and Kaczyński “will determine whether it survives as an open society true to the values upon which it was founded”.

He labels the budget veto as “a desperate gamble by two serial violators” – an attempt by Viktor Orbán and “to a lesser extent” Jaroslaw Kaczyński to oppose EU’s attempts at placing “a practical limit on personal and political corruption”.

Soros argues that Viktor Orbán “has constructed an elaborate kleptocratic system to rob the country blind”.   This includes transferring “vast sums of public money to private foundations that he indirectly controls”.   In a “clever constitutional trick” these entities have been removed from the public domain “since it would take a 2/3 Parliamentary majority to return them to the Hungarian people”.

Furthermore, there have been “fraudulent transactions”, he claims, in which companies close to Orbán purchased over 16,000 ventilators on behalf of Hungary for more than $1 billion, “far exceeding the number of intensive care beds and medical personnel that could operate the ventilators”.  Hungary paid more than any other EU country for ventilators from China – over fifty times more than paid by Germany.  The European Anti-Fraud Office (OLAF) should investigate whether the EU was defrauded, Mr. Soros argues. He also calls for the contract to be investigated under which Hungary will become the first country to use the Russian Covid-19 vaccine.

Soros writes that, as a philanthropist of “Hungarian Jewish” origin who has been active in Hungary for more than thirty years, he is particularly concerned with the situation in the country, which is a “tragedy” for its people.  He argues that “Orbán is using the new wave of COVID-19 to amend the Hungarian Constitution and the electoral law and to entrench himself as prime minister for life by constitutional means”.  He is determined to “avoid a repeat of local elections in 2019 where Fidesz lost control of the local government of Budapest and other major cities”.

There is now “practically no way the opposition can prevail” Mr. Soros warns, since Orbán “exercises almost total control over the countryside where the majority of the population lives”. In many villages, he argues, “voting is not secret” and Orbán controls the information they receive.

EU funds must be diverted away from the Hungarian government and channeled to local authorities in the country, he argues, where “unlike at the national level there is still a “functioning democracy”.  The city of Budapest, like other cities under opposition control, have been deliberately deprived of financial resources by Orbán, creating a $290 million shortfall in the city’s 2021 budget.  Attempts by the city to borrow from the European Investment Bank to buy new mass transportation equipment amenable to social distancing were vetoed by Orban, Mr. Soros claims.

George Soros is chairman of Soros Fund Management and the Open Society Foundations. He is the author of many books, including The Alchemy of FinanceThe New Paradigm for Financial Markets: The Credit Crisis of 2008 and What it Means, and The Tragedy of the European Union: Disintegration or Revival? His most recent book is In Defense of Open Society (Public Affairs, 2019). 

Crime

Over 40 arrested in biggest-ever crackdown against drug ring smuggling cocaine from Brazil into Europe

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In the early hours of the morning (27 November), more than a thousand police officers with the support of Europol carried out co-ordinated raids against the members of this highly professional criminal syndicate. Some 180 house searches were executed, resulting in the arrest of 45 suspects. 

The investigation uncovered that this drug trafficking network was responsible for the annual importation of at least 45 tonnes of cocaine into the main European seaports, with profits exceeding €100 million over the course of 6 months.

This international sting, led by the Portuguese, Belgian and Brazilian authorities, was carried out simultaneously by agencies from three different continents, with coordination efforts facilitated by Europol:

  • Europe: Portuguese Judicial Police (Polícia Judiciária), Belgian Federal Judicial Police (Federale Gerechtelijke Politie, Police Judiciaire Fédérale), Spanish National Police (Policia Nacional), Dutch Police (Politie) and the Romanian Police (Poliția Română)
  • South America: Brazilian Federal Police (Policia Federal)
  • Middle East: Dubai Police Force and Dubai State Security

Results in brief 

  • 45 arrests in Brazil (38), Belgium (4), Spain (1) and Dubai (2).
  • 179 house searches.
  • Over €12m in cash seized in Portugal, €300,000 in cash seized in Belgium and over R$1m and US$169,000 in cash seized in Brazil.
  • 70 luxury vehicles seized in Brazil, Belgium and Spain and 37 aircrafts seized in Brazil.
  • 163 houses seized in Brazil worth in excess of R$132m, two houses seized in Spain worth €4m, and two apartments seized in Portugal worth €2.5m.
  • Financial assets of 10 individuals frozen in Spain.

Global co-operation 

In the framework of intelligence activities underway with its operational counterparts, Europol developed reliable intelligence concerning the international drug trafficking and money laundering activities of a Brazilian organized crime network operating in several EU countries.

The criminal syndicate had direct contact with drug cartels in Brazil and other South American source countries who were responsible for the preparation and the shipments of cocaine in maritime containers bound to major European seaports.

The scale of cocaine importation from Brazil to Europe under their control and command is massive and over 52 tonnes of cocaine were seized by law enforcement over the course of the investigation.

In April 2020, Europol brought together the involved countries who have since been working closely together to establish a joint strategy to bring down the whole network. The main targets were identified on either sides of the Atlantic Ocean.

Since then, Europol has provided continuous intelligence development and analysis to support the field investigators. During the action day, a total of 8 of its officers were deployed on-the-ground in Portugal, Belgium and Brazil to assist there the national authorities, ensuring swift analysis of new data as it was being collected during the action and adjusting the strategy as required.

Commenting on this operation, Europol’s Deputy Director Wil van Gemert said: "This operation highlights the complex structure and vast reach of Brazilian organized crime groups in Europe. The scale of the challenge faced today by police worldwide calls for a coordinated approach to tackle the drug trade across continents. The commitment of our partner countries to work via Europol underpinned the success of this operation and serves as a continued global call to action."

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EU

Navalny calls on Europe to follow the money

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The European Parliament’s Foreign Affairs Committee held an exchange of views with representatives of the Russian political opposition and NGOs on the current political and socio-economic situation in Russia.

Among the speakers was Alexei Navalny, who has recently recovered from being poisoned with a nerve agent similar to the one used in the Salisbury attack targeted at Sergei Skirpal and his daughter. 

Navalny called on Europe to adopt a new strategy towards Russia, that meets the new developments in Russian state leadership. He said that the forthcoming elections for the State Duma would be an absolutely crucial event and that everyone should be able to participate. If opposition politicians are not allowed to participate he asked the European Parliament and every European politician not to recognize the outcome.

Navalny told MEPs that it was not enough to sanction those responsible for carrying out his poisoning and that there was little sense in sanctioning those who didn’t travel a lot or who didn’t own assets in Europe. Instead, he said the main question that should be asked is who gained financially from Putin’s regime. Navalny pointed to the oligarchs, not just the old ones, but the new ones in Putin’s inner circle, with name-checks for Usmanov and Roman Abramovich. He said that these sanctions would be warmly welcomed by most Russians. 

On the various decisions of the European Court of Human Rights that have been ignored by the Russian judiciary, Navalny said it would be very easy to sanction them to prevent them from traveling to Europe and it would be very effective.

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coronavirus

Commission approves German scheme to compensate accommodation providers in the field of child and youth education for damages suffered due to the coronavirus outbreak

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The European Commission approved, under EU state aid rules, a German scheme to compensate accommodation providers for child and youth education for the loss of revenue caused by the coronavirus outbreak. The public support will take the form of direct grants. The scheme will compensate up to 60% of the loss of revenues incurred by eligible beneficiaries in the period between the beginning of the lockdown (which started on different dates across the regional states) and 31 July 2020 when their accommodation facilities had to be closed due to the restrictive measures implemented in Germany.

When calculating the loss of revenue, any reductions in costs resulting from income generated during the lockdown and any possible financial aid granted or actually paid out by the state (and in particular granted under scheme SA.58464) or third parties to cope with the consequences of the coronavirus outbreak will be deducted. At the central government level, facilities eligible to apply will have at their disposal a budget of up to €75 million.

However, these funds are not earmarked exclusively for this scheme. In addition, regional authorities (at Länder or local level) may also make use of this scheme from the local budgets. In any event, the scheme ensures that the same eligible costs cannot be compensated twice by different administrative levels. The Commission assessed the measure under Article 107(2)(b) of the Treaty on the Functioning of the European Union, which enables the Commission to approve state aid measures granted by member states to compensate specific companies or specific sectors for the damages caused by exceptional occurrences, such as the coronavirus outbreak.

The Commission found that the German scheme will compensate damages that are directly linked to the coronavirus outbreak. It also found that the measure is proportionate, as the envisaged compensation does not exceed what is necessary to make good the damages. The Commission therefore concluded that the scheme is in line with EU state aid rules.

More information on actions taken by the Commission to address the economic impact of the coronavirus pandemic can be found here. The non-confidential version of the decision will be made available under the case number SA.59228 in the state aid register on the Commission's competition website.

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