Mr Soros argued that the eurozone should target 5% economic growth, reports The BBC.
That would require the bloc to abandon German-backed austerity measures and accept higher inflation, he says.
He also backed a new European Fiscal Authority financed by VAT receipts to oversee eurozone government finances.
In an article published in Monday’s New York Review of Books, Mr Soros said that Germany should become a more “benevolent” leading country or exit the single currency: “Either alternative would be better than to persist on the current course.”
Mr Soros will also outline his ideas in a speech in Berlin later on Monday, just days before Germany’s constitutional court rules whether the government’s backing for the new ESM bailout fund is legal or not.
The constitutional challenge has already delayed the launch of the 700bn euro facility, originally scheduled for July.
Critics claim the mechanism is tantamount to German taxpayers funding foreign governments in breach of the country’s constitution.
The ESM is an integral part of the European Central Bank’s bond-buying scheme, announced on Thursday.
Debtor governments would have to make a formal request for help – a bailout – from the ESM or its sister fund the EFSF.
But, Mr Soros said that the ECB plan to ease the pressure on indebted nations such as Spain and Italy could deepen divisions within the eurozone.
The ECB’s bond-buying programme may save the euro but it is also a step towards the permanent division of Europe into debtors and creditors, he said.
“The debtor countries will have to submit to supervision by the Troika but the creditors will not… and the divergence in economic performance will be reinforced.”
Mr Soros said the prospects of prolonged depression and a two-tier Europe would “eventually destroy the European Union.”
Instead, Mr Soros has advocated the creation of a European Fiscal Authority (EFA) to oversee the bailout funds and make key economic decisions for all eurozone governments to establish “a level playing field”.
Indebted governments would be able to transfer debt in excess of a 60% of national income or GDP to a debt reduction fund which would agree to freeze the money owed for 10 years in return for the government carrying out agreed economic reform.
The EFA and debt reduction fund could be financed by a proportion of VAT receipts across the eurozone, tantamount to German and Finnish taxpayers lending money to the Spanish or Greek government, he says.
This is likely to prove unpopular with many in Germany, including the Bundesbank, which has continually argued that individual eurozone governments should be responsible for their own debt.
Germany’s central bank is also likely to oppose Mr Soros’ 5% economic growth target. For the region’s wealth to grow so strongly, prices and wages are also likely to rise sharply leading to inflation above the ECB’s 2% target for several years.
Mr Soros said the strong expansion in European wealth would allow the eurozone “to grow its way out of its excessive debt burden.”
Mr Soros insists that “if the members of the euro cannot live together without pushing their union into a lasting, they would be better off separating.”
Although, he pointed out, it matters who leaves the euro. He advocates a German exit instead of a departure by Greece and weaker economies.
“A German exit would be a disruptive but manageable one-time 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.”
By leaving, the euro is likely to fall in value making eurozone-made goods cheaper for consumers overseas and also in Germany.
However, a return to the Deutschmark would make German-made goods more expensive overseas and within the eurozone which could hurt German exporters.
Germany is also the home to the European Central Bank and the biggest national creditor to indebted nations within the eurozone such as Greece, Portugal and Ireland all of which would make Germany’s exit from the eurozone logistically difficult.