At January’s World Economic Forum annual meeting, I made a long delayed appearance at the annual dinner hosted by billionaire hedgie turned philanthropist George Soros.
As the 86 year old billionaire hosts his event on the most popular night of Davos week – Thursday – I’ve always ended up with other commitments. But made a conscious effort this year.  Soros did not disappoint.
Short, forthright and on point, he focused on the “avoidable disaster” of Brexit, bemoaning a British voting public that were “in denial” but adding it was a necessary wake-up call for a European Union which had become too complicated and not fulfilled expectations.
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What followed made me wonder whether the man who broke the Bank of England had lost his marbles. But looking back on my notes, the octogenarian’s prescience was remarkable.
He is no fan of UK Prime Minister Theresa May, predicting at the dinner that she she “won’t last”. And after telling us how divorces are more difficult than weddings, the thrice-married Soros suggested there would be a rapprochement between the parties in 2019 – “the UK may leave on one day and be back in the EU the next.”
Yesterday Soros published a fascinating Op-Ed updating his views. Even sceptics are now paying attention. Especially after Mrs May’s snap election transformed the Maggie Thatcher wannabe into a lame duck.
He also reinforces a growing view that while Brexit won’t be reversed, it will be a gentle version of “soft” – and for many, hardly noticeable. Reason, he reckons, is that the UK is fast approaching the tipping point which characterises all unsustainable economic developments – something he calls reflexivity – when reality catches up with the false hopes of the general population. It’s consistent with UK Chancellor of the Exchequer and “Hard” Brexit opponent Philip Hammond who reminded his fellow Conservatives that “The British people didn’t vote to become poor.”
So what happens next?
Soros believes Mrs May will keep her job because nobody else wants it. But she is now correctly reading the change in the wind and will approach the Brexit negotiations in “a conciliatory spirit”. This opens the way for the UK to reach agreement on the EU’s terms. Most critically, that the country will remain a member of the single market for another five years rather than rushing off after the currently proposed two years.
He says: “This would be a great relief to the European Union because it would postpone the evil day when Britain’s absence would create an enormous hole in the EU’s budget. That would be a win-win arrangement.”
This, he says, means “the divorce process would take at least five years to complete and during that time new elections would take place. If all went well, the two parties may want to remarry even before they have divorced.”
In Davos, I was sceptical. But as Brexit’s economic pennies are dropping, the Soros thesis is looking increasingly likely. If so, this more rational approach to what has been a high emotive discourse, would likely trigger a rebound in the Pound, easily the most undervalued of the world’s major currencies.
