NEW YORK – There is a real danger that the "nightmare" euro crisis could destroy the European Union and Germany should either step up to fix it or step out of the currency union altogether, fund manager George Soros said on Monday.
The crisis "is having tremendous impact in the state of affairs, it is pushing the EU into a lasting depression, and it is entirely self-created," said Soros, Chairman of Soros Fund Management.
"There is a real danger of the euro destroying the European Union. The way to escape it is for Germany to accept ... greater commitment to helping not only its interests but the interests of the debtor countries, and playing the role of the benevolent hegemon," he said at a luncheon hosted by the National Association for Business Economics
Germany should act as the leader of the union such as the United States was for the free world after the Second World War, Soros said.
The influential fund manager floated another solution to the crisis that has gone on for more than two years: Germany could leave the euro, "and the problem would disappear in thin air," as the value of the euro declines and yields on the bonds of debtor countries adjust.
The notion that governments are "riskless" is the main false assumption underlying the euro zone, Soros said, adding it could be corrected by introducing Eurobonds.
"But that has become politically unacceptable by Germany," he added.
(Reporting by Manuela Badawy and Jonathan Spicer; Editing by Leslie Adler and Andre Grenon)