Soros attacks EU for failure to stand up to America

George Soros, the Hungarian-American financier who has invested his billions in encouraging democracy in eastern block countries is turning his attention to western Europe because he believes the European Union (EU) is failing.

The Business can reveal he is to invest hundreds of millions of dollars in foundations, the first of which will be in London or Paris.

Their mission will be to encourage Europe to stand up to America and to promote a more focused democratic power.

In an interview with The Business he said: "The attitude of the Bush administration has had disastrous consequences; the world needs an alternative and the European Union can provide it.

"In its unfinished state, the European Union suffers from several deficiencies. It is too unwieldy for the size of its membership, it is opaque and bureaucratic, and the democratic influence is too indirect, so that people feel alienated.

"For many years, my foundation network has been active in the accession countries, and I believe that the time is right to extend our activities into the rest of the EU."

Soros, who made $1bn (543m, E790m) from the collapse of sterling in 1992, has given up making money to concentrate on funding a network of foundations promoting democracy and open societies around the world.

He has also turned philosopher and was in London for the launch of his latest book, The Age of Fallibility -- The Consequences of The War on Terror, in which he explains why he has decided to fund foundations in western Europe.

News of the first location in Paris or London is expected after the summer. He says: "The construction of the EU has now missed a step. The political will moving the process forward has run out of steam. The dissatisfaction found expression in the recent rejection of the European Constitution.

"The European Union has a mission: the spread of peace, freedom and democracy. The practical message for Europeans is that the world really needs a strong European union with a mission which is different to America's priorities. Are they doing as much as they could to change the world? They could do a lot more."

In the past, his words moved markets and he still makes economic predictions. He warns: "There is an impending global correction. It will be prompted by higher interest rates. We are in a bear market."

He sees no sign of the euro collapsing and accuses investors in Rosneft, the Russian energy group about to debut on the stock market, of folly. "It will be a very risky investment. Investors are buying into a company of which they have no control. Russia wants to use energy as a ruse for reasserting its dominance over Europe. The London Stock Exchange ought to be more discriminating in its listing of foreign companies."