George Soros has warned that Russia’s expansionism poses an existential threat to the EU and called for greater material support for Ukraine.

The investor and philanthropist argues that Vladimir Putin’s mix of authoritarianism and aggressive nationalism represents an alternative model to western liberal democracies, referring to the admiration for the Russian president expressed by the Ukip leader, Nigel Farage, the president of France’s Front National, Marine Le Pen, and Hungary’s prime minister, Viktor Orbán.

“Europe is facing a challenge from Russia to its very existence. Neither the European leaders nor their citizens are fully aware of this challenge or know how best to deal with it,” Soros writes in an article published in the New York Review of Books.

“Now Russia is presenting an alternative that poses a fundamental challenge to the values and principles on which the European Union was originally founded. It is based on the use of force that manifests itself in repression at home and aggression abroad, as opposed to the rule of law.”

Soros told the Guardian: “There is a general dissatisfaction with the EU as a result of the euro crisis, which has perverted the initial impetus for forming a union of like-minded democratic states. The euro crisis was mishandled and lasted a long time, and it turned a voluntary union of equals into something quite different.”

Soros said the EU had become a dysfunctional relationship between creditor and debtor nations, resulting in widespread resentment. “Putin has established good relations with those agitating against Europe,” he said. “The failure of Europe as an experiment in supranational government would make Russia a potent threat … The collapse of Ukraine would be a tremendous loss for Nato, the European Union and the United States. A victorious Russia would become much more influential within the EU and pose a potent threat to the Baltic states with large ethnic Russian populations.”

Facebook Twitter Pinterest George Soros, says Putin has established good relations with those agitating against Europe. Photograph: Stefan Zaklin/EPA

Soros, founder and chairman of the Open Society network of pro-democracy foundations, predicts that after the elections in Ukraine on Sunday, the Russian president will offer his Ukrainian counterpart, Petro Poroshenko, a gas supply deal on condition he appoint a prime minister acceptable to Putin. If that is refused, Putin “may then revert to the smaller victory that would still be within his reach: he could open by force a land route from Russia to Crimea and Transnistria [a pro-Moscow breakaway statelet in Moldova] before winter”.

Soros calls for radically boosted western support of Ukraine with an “immediate cash injection of at least $20bn with a promise of more when needed” to help write off public debt, and help to reform the country’s energy sector to make it less dependent on Russia. By assisting Ukrainian reformers, he argues that the EU would be rediscovering its founding principles. “The European Union would save itself by saving Ukraine,” Soros said.