Billionaire investor George Soros warned that the euro monetary union may collapse if European Union (EU) leaders fail to rein in the region’s long-running debt troubles at a June 28-29 summit.

The EU summit in Brussels starting June 28 is the first meeting of European leaders since Greek parliamentary elections on June 17.

Soros called on Europe to start a fund to buy Italian and Spanish bonds, warning that a failure by leaders meeting this week to produce drastic measures could spell doom for the common currency.

The EU's late-June summit in Brussels is at risk of becoming a fiasco that ultimately helps usher Greece out of the eurozone if Germany persists in blocking efforts to spare Italy and Spain the market's current excessive risk premiums, Soros wrote in a Financial Times op-ed on Monday.

Even if such a fatal accident is averted, an emerging danger is a permanent relegation of Europe's periphery to second-class status, with Germany effectively at the center of an empire, the world-renowned investor wrote.

German Chancellor Angela Merkel and European Central Bank (ECB) President Mario Draghi are correct that ECB rules prevent the central bank from addressing individual countries' fiscal issues, Soros said.

Policy makers should therefore create a European Fiscal Authority to purchase sovereign debt in return for Italy and Spain implementing achievable budget cuts, Soros was quoted as saying.

Funding for the purchases would come from the sale of European Treasuries, which would have low yields because they would be backed by each euro member, he said.

While Spain and Italy would be required to undertake structural reforms, the fund would buy and hold the countries' outstanding debt.

The main obstacle to such a scheme, in Soros's view is resistance from Germany.