Tuesday

5th Jul 2022

Soros tells EU to step up support for eastern states

Billionaire investor George Soros has said the European Union must do more to help its struggling eastern region, including a fast-tracking of member state applications to join the euro currency.

In an interview with EUobserver on Thursday (12 November), he also called on the EU to develop a dedicated strategy to alleviate the difficulties faced by the region's Roma population.

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  • The EU is not meeting its obligations to eastern states says Soros (Photo: World Economic Forum)

"Europe has a responsibility because the financial system of eastern countries is in the hands of western banks. And that's what has infected eastern Europe," he said. "Europe has a responsibility to which it is not living up to."

The world-famous currency speculator and philanthropist points to the hardships currently endured by Latvian citizens, and argues their entry into euro area ahead of the current schedule would have a minimal impact on the common currency of the 16-member eurozone.

"It would actually improve the conditions of Latvia tremendously without really hurting the euro," he said.

Eastern Europe was struck particularly hard by last year's financial crisis, with foreign denominated debts, imploding housing bubbles and falling exports proving to be a toxic mix.

Latvia, Romania and Hungary have all been forced to tap International Monetary Fund and EU loans in a bid to tackle balance of payments problems, with governments also falling this year in the former two.

While the difficulties continue, senior European officials, including the president of the European Central Bank, Jean-Claude Trichet, have grown increasingly alarmed at the rising strength of the euro against the dollar in recent months, fearing it could slow exports and dampened the union's nascent economic recovery.

As a result, the possibility of a small depreciation caused by the accession of certain eastern states would be beneficial, said Mr Soros. "The euro is too strong as it is and has a tendency to rise further," he warned.

The euro's strength is no reflection of the group's weak economy, say analysts, being more the result of the currency's 'anti-dollar' status as a popular port of call for currency investors when the dollar is weak.

Time for a dedicated Roma strategy

Known for his currency gamble in September 1992 that famously "broke the Bank of England" and earned him a cool $1.1 billion, Mr Soros is in Brussels to attend an international donor conference which successfully raised €25 million for the Roma Education Fund.

The Hungarian-born 79-year-old said EU citizens are unaware of the poor levels of education and the terrible living conditions that many Roma have suffered since the fall of Communism and the subsequent job cuts in heavy industry that followed in eastern Europe.

Compounding the problem is the frequent hostility shown towards Romani individuals by members of the general population who see them as a security threat.

"You now have parties in Hungary and Bulgaria that feed on the resentment felt towards the Roma," said Mr Soros, who welcomes the positive contribution made by the EU so far, but adds that more needs to be done.

"I think the European Union needs to develop a Roma strategy," he says, and is confident that progress can be made in this area under the upcoming Spanish EU presidency, a country that has had considerable success in integrating its Roma population.

EU funding for the Roma population comes largely from the European Social Fund, with the last programming period (2000-2006) seeing some €275 million go to projects specifically targeted at the group.

In 2005, twelve European countries launched the Decade of Roma Inclusion, a project that aims to improve the socio-economic conditions of Europe's largest minority that numbers into the many millions but has not been accurately quantified.

Recent EU enlargements, combined with the bloc's freedom of movement laws, have resulted in a steady march westwards of Roma communities, with Italy and Spain the main recipients.

The results have frequently been explosive, not least in Italy where murders blamed on Romani individuals have resulted in revenge attacks by vigilante groups.

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