Germany should leave the euro zone if it is not prepared to take a more decisive lead in helping the euro zone's weaker nations, veteran financier George Soros has said.
Mr Soros said Europe faced a prolonged depression and an acrimonious end to the European unification project if steps were not taken.
He said its southern nations need help to grow their way out of the debt crisis by collectively assuming some of their debt and relaxing its German-led insistence on austerity.
"Germany should either lead in developing a growth policy, political union and burden-sharing, accept the cost of leadership, or leave through an amicable arrangement," Mr Soros said in an interview with Reuters television in Vienna.
Mr Soros, a liberal philanthropist who rose to fame as an investor on a big bet against the British pound in 1992, said a Germany-free euro zone could be more competitive in exports and service its debts more cheaply with a weaker, France-led "Latin" euro.
Otherwise, Germany should step up and accept its de-facto leadership role, and abandon its Bundesbank-led ideological opposition to central bank financing of states and strict adherence to a goal of inflation close to but below 2%.
Berlin has given its backing to the European Central Bank's new bond-buying programme to lower struggling euro zone countries' borrowing costs, which Germany's central bank has criticised.
Mr Soros said the plan would likely buy Europe more time than previous measures had, but was sceptical of its long term effectiveness.
"I think it was a positive development in the sense that it goes a long way to reassure the markets that the euro is here to stay. At the same time it would be big mistake to think that it is actually a step towards a lasting solution, because it also actually reinforces the creation of a two tier Europe, one which is divided into debtors and creditors," he said, adding: "It is positive in the short run, but negative in the long run."
Mr Soros predicted Spain and Italy would not apply to be part of the programme.
What Europe needed more was some form of common euro zone bond, which was currently not acceptable to Germany, as well as a need for Europe to grow, said Mr Soros.
Mr Soros, 82, drew a parallel with the financial crisis of 1982, when lenders protected the international banking system by lending debtor countries just enough to service their debts, pushing them into severe austerity programmes that led to depression.
"This policy is pushing Europe into a depression which is going to last five or 10 years, because it is almost impossible to work your way out of excessive indebtedness by shrinking the economy. Because the debt is a ratio between the accumulated debt and the GNP (Gross National Product)," Mr Soros said, adding that it would compound slowing global economic growth.
Elaborating on an essay published on Saturday on the New York Review of Books website, Mr Soros said such a scenario put at risk not only the euro currency but the whole European Union, ending a decades-long project to unite the continent.
He predicted Germany would not pressure Greece to leave the European Union but would continue to provide just enough support for it to service its debts, while insisting it persist with a harsh austerity programme.
"Germany is going to take a hard line on Greece but will not go as far as to push Greece out of the euro or out of the European Union," he said.
He added that France might have difficulties in accepting a role as the leader of a "Latin" euro.
Mr Soros will give a speech entitled "The Tragedy of the European Union" in Berlin today.
Mr Soros's Cayman Islands-based Soros Fund Management has around $25 billion in assets. Mr Soros himself is worth about $20 billion, according to Forbes.
