Soros: European stimulus will benefit the rich

George Soros

Mario Draghi has been widely praised for his decision to fire up the European Central Bank's printing presses to rescue the region's economy. George Soros isn't convinced.

The billionaire investor warned Friday that the ECB's stimulus plan might backfire.

"My main concern is that it will make the divergence between the rich and poor bigger," Soros said at the World Economic Forum in Davos.

The veteran investor said the main beneficiary of European QE would be people who already own assets. Their wealth will grow as investors move cash out of government bonds and into alternative assets, driving up the price.

"But wages will remain under pressure," he said.

He warned that the growing gap between rich and poor could have dramatic political consequences. Support for anti-EU parties is already rising.

Soros said Europe would be better served by embarking on more reforms, and increasing government spending on big infrastructure projects.

Europe's troubled economy gets big boost
Europe's troubled economy gets big boost

Related: Davos complete coverage

Germany could set an example by spending money on its roads to kick start growth.

"The ports are new but the roads leading to them are full of potholes," he said.

Many economists say Draghi's plan is necessary but not sufficient to save Europe from stagnation.

Soros, who is retired, said the sheer size of the ECB stimulus would undoubtedly move markets -- especially currencies.

"If I was still active in the business, I could see some significant moves coming," Soros said.

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