Increasing division could collapse euro, soros warns

Billionaire financier George Soros warned on Wednesday that Europe could potentially fall apart because of the “two-speed Europe” of haves and have-nots that is being perpetuated by the reform of the embattled euro.

He told a news briefing at the World Economic Forum that the currency used by 17 EU nations is in the process of reform following concerns over the debt crisis that enveloped Greece and Ireland and is threatening others. Its flaw, he said, of having a common central bank but no common treasury was being addressed with the creation of a permanent European Financial Stability Facility, which was created to bail out debt-ridden countries.

But Soros said the reforms are not addressing the euro's real problem — that the currency has divided the richer EU countries from the poorer ones. “The euro was supposed to bring about convergence, and effectively it created divergence and that is now being perpetuated,” he said. “So you are going forward with this new structure. You're going to have a two-speed Europe, and that is going to be politically very disruptive.”