George Soros has criticised Germany's "can't do" attitude and said it will be to blame if it blocks plans to rescue the single currency.
Writing in the Financial Times, the billionaire hedge fund manager suggested the eurozone should set up a fund to buy and hold debt from crisis-hit countries in return for them undertaking reforms.
"If the rest of Europe is united behind this proposal and the Bundestag rejects it Germany must take full responsibility for the financial and political consequences," he wrote.
His proposed debt reduction fund would issue bonds guaranteed by all member states "and pass on the benefit of cheap financing to the countries concerned".
If the beneficiary countries did not make the specified structural reforms, they would be fined or suffer another form of penalty.
Soros said this should be "proportionate to the violation so that it would not turn into a nuclear option that cannot be exercised", to protect against moral hazard.
These countries would then enter into debt reduction programmes "tailored not to jeopardise their growth", he wrote.
Only then should the eurozone consider a full political union and the introduction of eurobonds, debt issued by one member state and guaranteed by all. Soros noted that the main obstacle to the plan was Germany, which is stuck in "can't do" mode.
He described Merkel's insistence that a political union should precede a fiscal and banking union as "unrealistic and unreasonable".
Founder and chairman of Soros Fund Management, Soros is better known as the man who broke the Bank of England by betting that the UK would be forced to devalue the pound during the 1992 currency crisis.
guardian.co.uk
Writing in the Financial Times, the billionaire hedge fund manager suggested the eurozone should set up a fund to buy and hold debt from crisis-hit countries in return for them undertaking reforms.
"If the rest of Europe is united behind this proposal and the Bundestag rejects it Germany must take full responsibility for the financial and political consequences," he wrote.
His proposed debt reduction fund would issue bonds guaranteed by all member states "and pass on the benefit of cheap financing to the countries concerned".
If the beneficiary countries did not make the specified structural reforms, they would be fined or suffer another form of penalty.
Soros said this should be "proportionate to the violation so that it would not turn into a nuclear option that cannot be exercised", to protect against moral hazard.
These countries would then enter into debt reduction programmes "tailored not to jeopardise their growth", he wrote.
Only then should the eurozone consider a full political union and the introduction of eurobonds, debt issued by one member state and guaranteed by all. Soros noted that the main obstacle to the plan was Germany, which is stuck in "can't do" mode.
He described Merkel's insistence that a political union should precede a fiscal and banking union as "unrealistic and unreasonable".
Founder and chairman of Soros Fund Management, Soros is better known as the man who broke the Bank of England by betting that the UK would be forced to devalue the pound during the 1992 currency crisis.
guardian.co.uk
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