A financier’s case for European unity and the open society
What the Work Is
Betting on Europe is a political and economic essay by the Hungarian-American investor and philanthropist George Soros, written in the context of the European sovereign debt crisis. The work presents Soros’s analysis of the European Union’s structural weaknesses and his prescriptions for preserving the European project. It emerges from Soros’s dual perspective as a financial market participant who had long studied economic instability and as a philanthropist whose Open Society Foundations had supported civil society across Europe since the fall of communism.
What the Book Is About
The book argues that Europe faces an existential choice between disintegration and deeper integration. Soros contends that the European Union, and particularly the eurozone, was constructed with fundamental design flaws that the financial crisis exposed. His central thesis is that the EU cannot survive in its current form—it must either move toward genuine fiscal and political union or risk unraveling altogether. The work reflects Soros’s broader intellectual framework, which holds that markets are inherently unstable and that political institutions must actively manage economic life rather than trust in self-correcting mechanisms.
Key Ideas and Themes
The book develops several interconnected arguments rooted in Soros’s long-standing intellectual commitments. Central to his analysis is the concept of reflexivity, the theory he formulated early in his career that market participants’ biased perceptions influence the very reality they are observing, creating feedback loops that drive prices away from fundamental values. Applied to Europe, this framework suggests that the eurozone’s crisis was not an accident but the predictable outcome of a monetary union without corresponding fiscal and political integration.
Soros draws a distinction between what he sees as two competing visions of Europe: the “open society” ideal, which he has championed throughout his philanthropic career, and what he terms “market fundamentalism”—the belief that markets should be left to regulate themselves with minimal government intervention. He argues that the latter ideology, which he sees as having dominated European policy-making, has proven disastrous. The book contends that the austerity measures imposed on struggling eurozone members were counterproductive, deepening recessions and fueling political extremism rather than restoring stability.
A related theme is the asymmetry between Germany’s economic power and the institutional arrangements of the eurozone. Soros examines how the common currency created imbalances between northern and southern Europe, with creditor nations accumulating surpluses while debtor nations accumulated unsustainable liabilities. He argues that the policy response to these imbalances—fiscal discipline imposed from above—failed to address the underlying structural problems and instead threatened to break the EU apart.
The book also addresses the broader geopolitical stakes of European integration. Soros presents the EU as a unique experiment in international cooperation that, if it fails, would have consequences far beyond economics. He connects the survival of the European project to the health of democratic governance globally, arguing that a fragmented Europe would be weaker in the face of authoritarian challenges and less capable of promoting the values he associates with open societies.
Structure and Approach
The work is organized as a policy argument rather than a memoir or a purely academic treatise. Soros combines his insider knowledge of financial markets with his experience funding civil society organizations across Europe to offer both diagnosis and prescription. The book moves between technical economic analysis and broader political commentary, reflecting Soros’s conviction that the two cannot be separated. His approach is explicitly interventionist—he writes not as a detached observer but as someone who believes that intellectuals and philanthropists have a responsibility to engage with the great questions of their time.
Significance and Influence
The book appeared at a moment when the future of the European Union was genuinely uncertain, with Greece’s debt crisis threatening to trigger a broader unraveling of the eurozone. Soros’s intervention was notable because he occupied an unusual position: a speculator who had profited from currency crises but who now argued for stronger, not weaker, European institutions. His critique of austerity resonated with a growing chorus of economists who questioned the wisdom of the fiscal policies imposed on southern European countries.
The work also reflects Soros’s broader intellectual project of applying philosophical ideas to practical policy questions. His argument that the eurozone’s problems stemmed from a misguided faith in market self-correction connects to his lifelong critique of what he calls market fundamentalism—a critique he had developed in earlier works on financial crises and global capitalism. In this sense, Betting on Europe is not merely a response to a particular crisis but a continuation of a coherent worldview that Soros had been articulating for decades.
The book’s significance also lies in its timing relative to Soros’s own political trajectory. As European nationalist movements began to gain strength, and as Soros himself became a target of conspiracy theories and political attacks, his arguments about the dangers of fragmentation and the need for European solidarity took on added weight. The work stands as a document of a particular moment in European history, when the fate of the union genuinely hung in the balance, and as a statement of principles from one of the continent’s most controversial and consequential public intellectuals.
Soros’s financial career provides essential context for understanding the perspective he brings to Betting on Europe. He began his career in 1954 at the London merchant bank Singer & Friedlander, working as a clerk before moving to the arbitrage department. In 1956, he moved to New York City to work as an arbitrage trader for F. M. Mayer, specializing in European stocks that were becoming popular with U.S. institutional investors following the formation of the Coal and Steel Community, which later became the Common Market. He subsequently worked as an analyst of European securities at Wertheim & Co. from 1959 to 1963, during which time he developed the theory of reflexivity to extend the ideas of his tutor at the London School of Economics, Karl Popper.
From 1963 to 1973, Soros served as a vice president at Arnhold and S. Bleichroeder, though business was slack following the introduction of the Interest Equalization Tax, which undermined the viability of his European trading. In 1966, he started a fund with $100,000 of the firm’s money to experiment with his trading strategies. In 1969, he set up the Double Eagle hedge fund with $4 million of investors’ capital, including $250,000 of his own money, based in Curaçao, Dutch Antilles. In 1970, Soros founded Soros Fund Management and became its chairman. By 1973, the Double Eagle Fund had $12 million and formed the basis of the Soros Fund, with Soros and Jim Rogers receiving returns on their share of capital and 20 percent of the profits each year.
The Quantum Fund and Currency Speculation
The fund that would become central to Soros’s reputation was renamed the Quantum Fund, by which time its value had grown to $12 million. By 1981, the fund had grown to $400 million, before a 22% loss in that year and substantial redemptions reduced it to $200 million. In July 2011, Soros announced that he had returned funds from outside investors’ money, valued at $1 billion, and instead invested funds from his $24.5 billion family fortune, due to changes in U.S. Securities and Exchange Commission disclosure rules. The fund had at that time averaged over 20% per year compound returns. In 2013, the Quantum Fund made $5.5 billion, making it again the most successful hedge fund in history, and since its inception in 1973, the fund has generated $40 billion.
Soros’s most famous financial intervention came during the Black Wednesday UK currency crisis of September 1992. He had been building a huge short position in pounds sterling for months, having recognized the unfavorable position of the United Kingdom in the European Exchange Rate Mechanism. For Soros, the rate at which the United Kingdom was brought into the mechanism was too high, their inflation was much too high at triple the German rate, and British interest rates were hurting their asset prices. By September 16, 1992, Soros’s fund had sold short more than $10 billion in pounds, profiting from the UK government’s reluctance to either raise its interest rates to levels comparable to those of other European Exchange Rate Mechanism countries or float its currency. The UK ultimately withdrew from the mechanism, devaluing the pound, and Soros’s profit on the bet was estimated at over $1 billion, earning him the nickname “the man who broke the Bank of England.” The estimated cost of Black Wednesday to the UK Treasury was £3.4 billion.
Reflexivity and Market Instability
The theory of reflexivity that Soros developed during his early career is central to his analysis in Betting on Europe. The theory posits that market values are often driven by the fallible ideas of participants, not only by the economic fundamentals of the situation. Ideas and events influence each other in reflexive feedback loops, leading markets to have procyclical “virtuous” or “vicious” cycles of boom and bust, in contrast to the equilibrium predictions of more standard neoclassical economics. In an interview concerning the late-2000s recession, Soros referred to it as the most serious crisis since the 1930s. According to Soros, market fundamentalism with its assumption that markets will correct themselves with no need for government intervention in financial affairs has been “some kind of an ideological excess.” In Soros’s view, the markets’ moods—a prevailing bias or optimism/pessimism with which the markets look at reality—”actually can reinforce themselves so that there are these initially self-reinforcing but eventually unsustainable and self-defeating boom/bust sequences or bubbles.”
The Asian Financial Crisis and Its Aftermath
During the 1997 Asian financial crisis, the prime minister of Malaysia, Mahathir Mohamad, accused Soros of using the wealth under his control to punish the Association of Southeast Asian Nations for welcoming Myanmar as a member. Mahathir made specific reference to Soros’s Jewish background and implied Soros was orchestrating the crash as part of a larger Jewish conspiracy. Nine years later, in 2006, Mahathir met with Soros and afterward stated that he accepted that Soros had not been responsible for the crisis. In 1998’s The Crisis of Global Capitalism: Open Society Endangered, Soros explained his role in the crisis, stating that by the beginning of 1997, it was clear to Soros Fund Management that the discrepancy between the trade account and the capital account in Thailand was becoming untenable. He wrote that the fund sold short the Thai baht and the Malaysian ringgit early in 1997 with maturities ranging from six months to a year, but that they were not sellers of the currency during or several months before the crisis; on the contrary, they were buyers when the currencies began to decline.
Also during this time, Soros, through his Quantum Fund, attempted to sell short the Hong Kong dollar, using similar strategies to those he used during his betting against the pound, baht, and peso. However, due in part to China’s backing by maintaining a fixed exchange rate with the Hong Kong dollar, Hong Kong’s currency remained more or less stable, and he lost most of the money shorted against the HKD. In 1999, economist Paul Krugman was critical of Soros’s effect on financial markets, proposing the term “Soroi” for investors who not only move money in anticipation of a currency crisis but actually do their best to trigger that crisis for fun and profit.
Legal and Regulatory Encounters
In 1988, Soros was contacted by a French financier named Georges Pébereau, who asked him to participate in an effort to assemble a group of investors to purchase a large number of shares in Société Générale, a leading French bank that was part of a privatization program. Soros eventually decided against participating in the group effort, opting to personally move forward with his strategy of accumulating shares in four French companies: Société Générale, as well as Suez, Paribas, and the Compagnie Générale d’Électricité. In 1989, the Commission des Opérations de Bourse conducted an investigation of whether Soros’s transaction should be considered insider trading. Soros had received no information from the Société Générale and had no insider knowledge of the business, but he did possess knowledge that a group of investors was planning a takeover attempt. Initial investigations found Soros innocent, but the case was reopened a few years later, and the French Supreme Court confirmed the conviction on June 14, 2006, although it reduced the penalty to €940,000. Soros denied any wrongdoing, saying news of the takeover was public knowledge. In December 2006, he appealed to the European Court of Human Rights, and in October 2011, the court rejected his appeal in a 4–3 decision, saying that Soros had been aware of the risk of breaking insider trading laws.
Philanthropy and the Open Society Foundations
Soros’s philanthropic activities, conducted through the Open Society Foundations, are integral to understanding his motivations in writing Betting on Europe. Between 1979 and 2011, he donated more than $11 billion to various philanthropic causes; by 2017, his donations “on civil initiatives to reduce poverty and increase transparency, and on scholarships and universities around the world” totaled $12 billion. His influence and activities helped set off the fall of communism in Eastern Europe in the late 1980s and early 1990s, and provided one of Europe’s largest higher education endowments to the Central European University in his Hungarian hometown. From 1979, as an advocate of ‘open societies’, Soros financially supported dissidents including Poland’s Solidarity movement, Charter 77 in Czechoslovakia and Andrei Sakharov in the Soviet Union.
Since the fall of the Soviet Union, Soros’s funding has played an important role in the newly independent countries. A 2017 study found that a grant program by George Soros which awarded funding to over 28,000 scientists in the former Soviet republics shortly after the end of the Soviet Union “more than doubled publications on the margin, significantly induced scientists to remain in the science sector, and had long-lasting [beneficial] impacts”. His funding of pro-democratic programs in Georgia was considered by Georgian nationalists to be crucial to the success of the Rose Revolution, although Soros has said that his role has been “greatly exaggerated”. Some Soros-backed pro-democracy initiatives have been banned in Kazakhstan and Turkmenistan. In 1997, Soros closed his foundation in Belarus after it was fined $3 million by the government for “tax and currency violations”. In June 2009, Soros donated $100 million to Central Europe and Eastern Europe to counter the impact of the Great Recession on the poor, voluntary groups and non-government organizations.
Political Opposition and Attacks
Soros’s extensive funding of political causes has made him a “bugaboo of European nationalists”. Numerous far-right theorists have promoted claims that characterize Soros as a dangerous “puppet master” behind alleged global plots. These portrayals of Soros, a Holocaust survivor, have been denounced as antisemitic conspiracy theories. In 2018, The New York Times reported that “conspiracy theories about him have gone mainstream, to nearly every corner of the Republican Party”. In March 2017, six US senators sent a letter to then secretary of state Rex Tillerson asking that he look into several grants the State Department and the US Agency for International Development have given to groups funded by Soros. The conservative group Judicial Watch filed a Freedom of Information Act lawsuit against the U.S. Department of State and USAID compelling them to release records regarding $5 million transferred from USAID to Soros’s Open Society branch in Macedonia, alleging that the money was deliberately used to destabilize the Macedonian government. The Open Society Foundation has said its activities in Macedonia were aimed at ethnic reconciliation with the Albanian minority and other forms of assistance since the collapse of Yugoslavia.
In January 2017, the “Stop Operation Soros” initiative was launched in Macedonia, seeking to present “questions and answers about the way Soros operates worldwide” and inviting citizens to contribute to the research. In a press conference held during the same month, one of the founders stated that the initiative would work towards the “de-Soros-ization” of Macedonia. Since 2012, the Hungarian Fidesz government has labelled George Soros as an enemy of the state. The government has disagreed with Soros’s involvement in the 2015 European migrant crisis, attacked the Open Society Foundations, and tried to revoke the licence of Central European University in Budapest, which failed mostly due to significant public outrage. In response, Soros called the government “a mafia state”. As the 2018 election period started, the government introduced public posters with a photo of Soros to create hostility in the general public towards him, using statements such as “Soros wants millions of migrants to live in Hungary” and “Soros wants to dismantle the border fence”. The government also prepared a three-part law plan called the “Stop Soros package” which would include various steps against NGOs doing volunteer work related to the refugee crisis. On May 16, 2018, Soros’s Open Society Foundations announced they would move its office from Budapest.
