NEW YORK ( TheStreet) -- Germany must fully commit itself to solving the European debt crisis or leave the euro, financier George Soros contends in a lengthy essay published Friday in the The New York Review of Books. Soros argues Germany is currently doing only the bare minimum to preserve the euro -- a policy that is "leading to a prolonged depression, political and social conflicts and the eventual breakup not only of the euro but of the European Union." Instead, the 82 year-old Hungarian-born billionaire contends Germany must allow higher inflation than it currently does, and commit to "establishing a more or less level playing field between debtor and creditor countries." Setting up that level playing field would involve a series of steps, such as creating a European Fiscal Authority that, unlike the European Central Bank, would be allowed to finance government deficits. Germany won't make such a move without pressure from France, Soros contends. He urges the French to ally themselves with Italy and Spain to present an "economically credible and politically appealing program," that would "recapture the European Union as the idealistic vision that fired people's imagination." Those three countries, then, could issue Germany the "lead or leave" ultimatum. While Soros prefers Germany lead the euro zone, he argues that a German departure from the common currency would be "a disruptive but manageable onetime event, instead of the chaotic and protracted domino effect of one debtor country after another being forced out of the euro by speculation and capital flight." A German exit would cause the devaluation of the euro, angering creditors but giving them no "valid" legal recourse. It would also encourage a German rush to buy up suddenly cheap real estate in the countries that remain in the euro, among other benefits, Soros writes. Soros is not the first to suggest Germans leave the euro. Essays published by Bloomberg, the Financial Times and a strategist interviewed by CNBC all mentioned the idea over a five day period from June 27 to July 1. At least one commentator argued fear of a German exit was responsible for driving the euro to a fresh two-year low against the dollar of $1.20 in mid-July. The euro has since rebounded and was worth about $1.28 on Friday.
Despite his radical proposal of a German exit, Soros would prefer to see Germany embrace a "historic opportunity" to take on the role of a "benevolent hegemon," as the U.S. did by providing $13 billion -- or 5% of its 1948 GDP -- to Europe at the end of World War II through the Marshall Plan. "Imperial power can bring great benefits, but it must be earned by looking after those who live under its aegis," Soros contends. -- Written by Dan Freed in New York. Follow this writer on Twitter.