'Dangerous' Germany could destabilise EU: Soros

23rd June 2010, Comments 0 comments

Billionaire investor George Soros warned on Wednesday that the euro could fail and that what he termed "dangerous" policy decisions in Berlin could destabilise the entire European continent.

"Unfortunately, a collapse of the euro and the European project cannot be ruled out," Soros was quoted as saying in the Die Zeit weekly.

"That would be tragic, because then Europe would be threatened by the sort of conflicts between states that have shaped European history," added Soros.

He said what he termed 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.

And Soros said that Berlin was "isolated globally" in a debate over deficit reduction ahead of the G20 summit in Toronto over the weekend.

"Due to its history, Germany is more worried about inflation than about recession. In the rest of the world, it is exactly the other way around."

"Germany's policy is a danger for Europe and could destroy the European project," he added.

US President Barack Obama has said countries should beware of throttling a nascent recovery by too strict austerity plans, seen as a dig at Germany, which plans more than some 80 billion euros (98 billion dollars) in spending cuts.

Chancellor Angela Merkel has hit back, saying that deficit reduction is crucial to economic recovery and that growth is not in danger.

© 2010 AFP

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