NEW YORK (

TheStreet

) -- The current crisis in Europe is a continuation of the 2008 U.S. crisis rather than a separate event and it is far from over, according to billionaire investor George Soros.

Billionaire investor George Soros

Soros made the comments in a interview with German publication

Der Spiegel

, where he weighed in provocatively on several topics.

Asked to compare the 2008 crisis in the U.S. subprime market with the current European crisis, Soros said "this crisis is still the continuation of the same crisis."

Soros went on: "The method the authorities rightly chose three years ago was to substitute the credit of the state for the credit in the financial system that collapsed. After the failure of Lehman Brothers, the European financial ministers issued a declaration that no other systemically important financial institutions would be allowed to fail. That was the artificial life support; it was exactly the right decision. But then

German Chancellor

Angela Merkel stated that such support would only be granted by each EU member state individually, and not by the European Union."

But the European Union must act as one, according to Soros, by issuing its own bonds--Eurobonds--guaranteed by the Union as a whole rather than individual countries.

That poses a problem, Soros told the publication, "because each European country remains in control of its own fiscal policy, and you have to rely on the country to meet its financial obligations."

The only solution, according to Soros, is for Germany to take the lead.

"The future of the euro depends on Germany. This is the point I really want to drive home. Germany is in the driver's seat because it is the largest country in Europe with the best credit rating and a chronic surplus. In a crisis, the creditor always calls the shots. Sure, this is not a position Germany or Chancellor Merkel ever desired and they are understandably reluctant to embrace it. But the fact is that Germans are now in the position of dictating to Europe what the solution to the euro crisis is."

If the Germans allow the Euro to fall apart, it would be catastrophic, Soros warns.

"If the euro were to break up, it would cause a banking crisis that would be totally outside the control of the financial authorities. So it would push not only Germany, not only Europe, but also the whole world into conditions very reminiscent of the Great Depression in the 1930s," Soros said.

Soros further argued China will defend the Euro, because it wants a viable alternative currency to the U.S. dollar. As a result, he says, he won't short the Euro. In fact, he says, that is why the Euro has been so strong relative to the dollar during the European crisis

"There is a mysterious buyer that keeps propping up the euro," he said.

Among other subjects, Soros argued that credit default swaps (CDS) should be banned because "it is a very dangerous instrument." Soros's statement echoes a famous earlier comment by Berkshire Hathaway Chairman Warren Buffett who referred to CDS as "financial weapons of mass destruction."

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Written by Dan Freed in New York

.

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