European Central Bank President Jean-Claude Trichet says George Soros's warning that German austerity could destroy the euro is dead wrong.

Chancellor Angela Merkel’s refusal to expand German debt actions will encourage confidence in consumers, investors and companies and help to consolidate the recovery, Trichet said in an interview with Italy's La Repubblica, according to CNBC.

"A currency that guarantees such stable prices, it's of value in the eyes of domestic and international investors.”

Trichet doesn't believe that austerity measures being put in place by European governments will cause deflation.

"I don't think that such risks could materialize," Trichet says. "As regards to the economy, the idea that austerity measures could trigger stagnation is incorrect."

Trichet wants each European country to reform its real economy.

"We ask all governments to be determined to carry out structural reforms to increase the potential growth," he said. "I insist on the need to boost work productivity: in the medium- and long-term, growth depends right on this."

But Soros insists that the euro is in crisis, and Germany is the main protagonist.

“By design, the euro was an incomplete currency at its launch,” Soros writes in the Financial Times. “When it came to sovereign credit, euro zone members were on their own,” he says.

“Germans don’t feel so rich any more, so they don’t want to continue serving as the deep pocket for the rest of Europe. This change in attitude is understandable, but it has brought the European integration process to a halt.”