Soros warned against addressing the crisis with spending cuts, urging the injection of funds instead.
"Otherwise we will repeat the mistakes that plunged America into the Great Depression in 1929. That's what Angela Merkel doesn't understand," he said.
US President Franklin Roosevelt addressed the crisis in 1933 with his New Deal, inspired by British economist John Keynes, which combined a reform of the banking system with major infrastructure projects.
He said it was a mistake to offer a bailout to Greece tied to high interest rates. "That's why the country can't be saved today, and the same thing will happen to Italy if we put this country in the straitjacket of paying harsh interest rates," Soros said.
A Greek default would cause an escalation of the crisis and could lead to a run on Italian and Spanish banks, and "Europe would explode," he said.