But the euro crisis has changed things and divided member countries "into two classes — creditors and debtors — with the creditors in charge, Germany foremost among them." Debtor countries have to pay substantial risk premiums for financing their government debt, which has pushed them into depression and puts them at a big competitive disadvantage that threatens to become permanent.
Soros says this was not a deliberate scheme but was a result of a series of policy mistakes when the euro was introduced. The most critical was that "the euro was an incomplete currency — it had a central bank, but did not have a treasury."
Austerity on its own is not only not working, but is a political and economic millstone round the necks of the victim countries and of Europe as a whole. Aiming for growth would give hope to millions of Europeans who are losing their jobs and seeing benefits cut as governments of indebted countries are forced to follow the German prescription. It would also promote growth in Japan, China and Asia, which are also running out of economic steam as the European economy slows and stutters and comes to a halt.
Successful growth could also help revive the European ideal, after which it might be possible to create a full European fiscal and currency union. Otherwise, austerity will suffocate and kill Europe.