MercoPress. South Atlantic News Agency

Soros warns that Germany’s policies threaten the Euro and European Union

Billionaire Soros: “Germany’s exit from the currency union would be helpful”

Germany's budget savings policy risks destroying the European project and a collapse of the Euro cannot be ruled out, billionaire investor George Soros said in a newspaper interview.

“German policy is a danger for Europe, it could destroy the European project,” he told German weekly Die Zeit.

Soros, who earned 1 billion US dollars in 1992 by betting against the British pound, added that he “could not rule out a collapse of the Euro.”

“If the Germans don't change their policy, their exit from the currency union would be helpful for the rest of Europe,” he said.

Chancellor Angela Merkel unveiled plans earlier this month for 107 billion Euros in budget cuts over the next four years -a package she hopes will bring Germany's structural deficit within European Union limits by 2013.

“Right now the Germans are dragging their neighbours into deflation, which threatens a long phase of stagnation. And that leads to nationalism, social unrest and xenophobia. Democracy itself could be at risk,” he said.

“Germany is globally isolated ... Why don't they let their salaries rise? That would help other EU states to pick up.”

Soros said the “disintegration” of the European Union was already taking place, with “the difference of opinion between Germany and France on economic policy bigger than 10 years ago”.

Paris and Berlin have clashed recently on the best way to shape Europe's economic architecture in the wake of the debt crisis in Greece and elsewhere in the Euro area.

Merkel had defended her budget cut plans after US President Barack Obama preached patience in clamping down on public spending. A German government official said on Tuesday Berlin did not expect to come under pressure at a G20 summit in Toronto this weekend to provide fresh stimulus measures.