Billionaire financier George Soros thinks the euro and the European Union itself are at risk of breaking up if Germany refuses to play its traditional role and make concessions, he told a newspaper.
The Germans have always made the concessions needed to advance the European Union, when people were looking for a deal. Not any more, Soros told Corriere della Sera in an interview published on Thursday.
That's why the European project is stalled. And if it can't go ahead from here, it will go backwards. It's important to understand that if you don't make the next steps forward for the euro, the euro will go to pieces and the European Union too, he said.
Soros, who is speaking at a variety of events in Italy this week, said whereas in the past there had been the political will to go forward, now there's a lot of doubt that it is there.
He said the EU needs a more flexible mechanism on deficit cuts so that countries do not have to cut public spending so drastically.
We need a sort of European Monetary Fund, which would make the adjustment less painful, he said.
Soros said he was sure Greece could be rescued, adding that although the Athens government was taking all the measures needed, Europe must help if necessary, adding interest rates on emergency funding should be as low as possible.
The 5 percent rate on the funding currently is a technical error, because it makes it more difficult for Greece to get out of the hole.
Speaking more generally on the crisis and the excessive debt that caused it, he said: The correction has scarcely started.
(Writing by Nigel Tutt)