Soros highlights economy woes

While the European Central Bank managed to halt market turmoil that threatened to break up the euro last year, its fundamental imbalances "have been papered over," said Mr Soros.

The currency's government debt crisis has split it into creditor countries such as Germany and debtors such as Greece, with the creditors in charge and demanding misguided austerity cutbacks in spending to reduce deficits.

He said the policy of cutbacks for indebted countries advocated by Germany and Chancellor Angela Merkel (pictured) "is just simply counterproductive" and "is pushing the entire eurozone into recession."

Mr Soros said Germany had only agreed to do the minimum to stop the eurozone from breaking up but has since begun backing down on its commitment to build an EU system of banking supervision and a way to restructure banks without increasing national government debt through bailouts.

He warned that it was "simply counterproductive, because you can't reduce debt by reducing GDP.

"So it's a wrong policy at this time. It's hurting the debtor countries more than Germany, but it is pushing the entire eurozone into a recession."

Mr Soros said a slumping economy would worsen political tensions between countries and the creditor-debtor divide risked breaking up the European Union itself.

"So the financial solution is politically unacceptable. In fact it is, in the long run, intolerable."