Story highlights
Saxo co-CEO: 'Euro should never have existed'
Germany fears Greek exit from eurozone would spark monetary union breakup
Euro has risen 10% against U.S. dollar since July 2012
Saxo's Christensen: 'Euro demise depends on Germany'
“I don’t think the euro should exist,” said Saxo Bank co-CEO Lars Seier Christensen to CNN’s Richard Quest, in terms that could hardly be less fractious to supporters of the 17-nation single currency bloc.
“It’s quite clear that what lacks here is fiscal union but it’s also very clear that the populations of Europe are not supportive of that goal.”
The eurozone will also pull itself apart as competitiveness will continue “to develop in different directions,” said the head of the online Danish investment bank. He added that the people of the eurozone – in particular, Germany as the monetary zone’s prime pillar – will not make sacrifices for “the weaker part of the eurozone” – Greece and other southern European countries.
Christensen’s controversial comments stand in stark contrast to what eurozone supporters have said – advocating for austerity to keep the union together.
Germany, Europe’s largest economy, fears that a Greek exit from the eurozone could lead to a domino effect in which other massively-indebted countries – Ireland, Portugal, Spain and Italy – may pull out from the common currency, leading to the breakup of the eurozone.
In December 2012, German Chancellor Angela Merkel won more support for bailout funds for Greece. In July, Mario Draghi, the president of the European Central Bank promised to do “whatever it takes to preserve the euro” which set off rallies for Greek, Spanish and Italian bonds.
Still, Saxo Bank’s Christensen believes the euro will disappear at some point in the future – and despite hitting 13-month highs – because he believes overall support does not exist.
“I’m not saying it’s a bad thing that support is not there,” said Christensen, “because the ability to adjust your currency is an important equilibrium between different economies and different developments. When that’s gone you’re left with a completely different set of problems.”
The bank CEO declined to give a timeline but said it “depends how long the Germans hold out… how long the German population is willing to buy into supporting” fiscal union.
“I can tell you the problem is going to get greater rather than smaller… I fear that the markets will take the thing apart eventually.”
