In politics, manipulating reality can take presidence over finding reality.

The reality is that financial markets are self-destabilizing; occasionally they tend toward disequilibrium, not equilibrium.

The lower interest rates fueled housing and consumption booms in countries such as Spain and Ireland. At the same time, Germany, struggling with the burdens of reunification, tightened its belt and became more competitive. All this led to a wide divergence in economic performance. Europe became divided into creditor and debtor countries.

I put forward a pretty general theory that financial markets are intrinsically unstable. That we really have a false picture when we think about markets tending towards equilibrium.

We [at Soros Fund Management] use options and more exotic derivatives sparingly. We try to catch new trends early and in later stages we try to catch trend reversals. Therefore, we tend to stabilize rather than destabilize the market. We are not doing this as a public service. It is our style of making money.

The key problem is the debt restructuring in the euro zone. As long as the debt burden is not reduced, there is no chance of the weaker EU countries regaining competitiveness.

We are trying to make the world a better place, but that is not necessarily what we accomplish. Many of the problems which preoccupy us are basically insoluble.