George Soros Has Hard Words for European Union

Source: World Economic Forum George Soros

Billionaire investor George Soros on Wednesday minced no words on the financial troubles faced by the Europe Union, as he addressed the future of the currency block before an audience in Davos.

Soros said that Europe is mired in a "spiral of decline" that reinforces itself, adding that, as things stand, "Weaker members of the euro zone are being left as Third World countries that borrowed in foreign currencies."

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"I'm not sure if authorities (in the EU) are deliberately prolonging the crisis, or if this is being driven by divergent views," he said.

He pointed to Hungary, currently bogged down in its own financial crisis, as a "precursor of what is stake" if the EU continues its current policies.

Soros said, however, that it's not to late to save the euro and the EU. But doing so requires a two-part plan: First the single currency block has to reform the way it is structured. Then it must provide economic stimulus. He dismissed structural austerity as something that merely reduces countries' ability to service their debts.

What kind of stimulus? The American billionaire suggested a single eurobond that can be issued at 1 percent.

Turning to Barack Obama, who on Tuesday said in his State of the Union address that the richest Americans should pay more in taxes, Soros agreed with the president.

"I'm a rarity in the hedge fund community," he said.