Europe has 3 months to address crisis: Soros

Europe is struggling with a fundamental flaw of its original design: that’s it’s a monetary and economic union but not a political or fiscal one, Soros said at the Festival of Economics in Trento, Italy, according to remarks posted Sunday on Soros’s website
The solution will require European deposit insurance to stem the outflows of deposits already being seen from peripheral countries’ banks, he said
It will also require allowing banks to access direct financing from the European Stability Mechanism — the region’s permanent bailout mechanism which currently is designed to be tapped by sovereign governments.
That will need to go hand-in-hand with euro zone-wide supervision and regulation, he said
“The heavily indebted countries need relief on their financing costs
 There are various ways to provide it but they all need the active support of the Bundesbank and the German government,” Soros said The challenge will be convincing Germans that it’s in their interest to take those steps, he said
“Nothing can be done without German support,” he said Soros said he expects that the Greek public, in June 17 elections,, “will be sufficiently frightened by the prospect of expulsion from the European Union” that it will lead to a government willing to abide by the current agreement,” he said
“But no government can meet the conditions so that the Greek crisis is liable to come to a climax in the fall.”
“By that time, the German economy will also be weakening so that Chancellor Merkel will find it even more difficult than today to persuade the German public to accept any additional European responsibilities,” he said, At the summit at the end of this month, authorities will likely announce a set of proposals that will cover all the bases but “offer only the minimum on which the various parties can agree, while what is needed is a convincing commitment to reverse the trend,” Soros said
“That means the measures will again offer some temporary relief but the trends will continue
 But we are at an inflection point
 After the expiration of the three months’ window the markets will continue to demand more but the authorities will not be able to meet their demands.” “The likelihood is that the euro will survive because a breakup would be devastating not only for the periphery but also for Germany,” he said
Germany would be left with large unenforceable claims against the periphery countries, he said
“A return to the Deutschemark would likely price Germany out of its export markets — not to mention the political consequences
So Germany is likely to do what is necessary to preserve the euro — but nothing more.”