Monday April 21, 2014 Search
Weather | Athens
17o C
11o C
News
Business
Comment
Life
Sports
Community
Survival Guide
Greek Edition
Saxo Bank CEO says euro is doomed as currency woes resurface

By Mahmoud Kassem

Lars Seier Christensen, co-chief executive officer of Danish bank Saxo Bank A/S, said the euro’s recent rally is illusory and the shared currency is set to fail because the continent hasn’t supported it with a fiscal union.

“The whole thing is doomed,” Christensen said yesterday in an interview at the bank’s Dubai office. “Right now we’re in one of those fake solutions where people think that the problem is contained or being addressed, which it isn’t at all.”

The euro has gained 8.2 percent versus the dollar in the past six months and reached as high as $1.3711 on Feb. 1, the strongest since Nov. 14, 2011. The European Central Bank forecasts the euro-area economy will shrink 0.3 percent this year and ECB President Mario Draghi said on Feb. 7 that the currency’s gains pose a risk for growth and inflation.

While the euro has strengthened, the economies of Germany, France and Italy all shrank more than estimated in the fourth quarter. Ministers from the 17-member euro area met during the week to discuss aid to Cyprus and Greece as a tightening election contest in Italy and a political scandal in Spain threaten to reignite the region’s debt crisis.

“I’d be a bigger seller of the euro at anything near 1.4,” according to Christensen, who said he isn’t making any speculative bets against the currency.

The euro declined 0.2 percent to 1.3332 against the dollar, falling for a fourth day.

France is grappling with shrinking investment, job cuts by companies such as Renault SA and pressure from European partners to speed budget cuts. While Germany expanded 0.7 percent last year, France posted no growth and Italy probably contracted more than 2 percent, the weakest in the euro area after Greece and Portugal, according to the European Commission.

The economy is on the brink of its third recession in four years and the highest joblessness since 1998. Prime Minister Jean-Marc Ayrault said Feb. 13 the country won’t make its budget-deficit target of 3 percent of gross domestic product this year as the economy fails to generate growth and taxes.

“Another possible fallout is getting rid of some of the countries that are being ruined by being in the euro, notably the southern European economies,” Christensen said. “People have been dramatically underestimating the problems the French are going to get from this. Once the French get into a full- scale crisis, it’s over. Even the Germans cannot pay for that one and probably will not.”

Cyprus has been shut out of debt markets for nearly two years with lenders including Bank of Cyprus Plc and Cyprus Popular Bank Plc losing 4.5 billion euros ($6 billion) in Greece’s debt restructuring last year. The nation is holding a presidential ballot today where the economy is the main issue rather than reunification of the divided island.

Spanish and Italian bonds rose last week as debt sales allayed concern the nations may struggle to raise funds before Italy goes to the polls to elect a new prime minister. Yields on Spain’s 10-year bonds fell for the first week in five as European Central Bank President Mario Draghi said the country had achieved “enormous progress” in its reforms. The spread between Spanish 10-year bonds and comparable German securities decreased two basis points to 354 basis points.

“It’s the political world that has been extremely supportive of the euro, not for economic reasons but for political reasons,” said Christensen, a long-time critic of the single currency and who now lives in Switzerland.

TPG Capital, the private equity firm started by David Bonderman, bought a 30 percent stake in Saxo Bank in August 2011 for about $560 million. Christensen and co-founder and co-CEO Kim Fournais maintain majority ownership of the company.

The Hellerup, Denmark-based bank said in August that first half profit dropped to 44 million kroner ($7.8 million) from 346 million kroner a year earlier.

[Bloomberg]

ekathimerini.com , Monday February 18, 2013 (11:05)  
Eurobank share offering on April 25-29
PPC to issue corporate bond of 500 mln
Primary surplus continued by end-March
Eurobank eyes top Core Tier 1 level in Greece
Greek Christians mark rare Good Friday in north Cyprus
Hundreds of Greek Orthodox pilgrims, some coming home after 40 years of forced exile, commemorated the crucifixion of Jesus in a rare Good Friday service in northern Cyprus. Held in this med...
Greece offers to help find Turkish F-16 lost in 1996
Greece officially offered on Thursday to assist Turkey in its efforts to locate and salvage a Turkish Air Force fighter jet which crashed in the Aegean almost 20 years ago. Greek Defense Min...
Inside News
BASKETBALL
Greens lose badly as CSKA Moscow
Panathinaikos has a mountain to climb in order to reach the Final Four of the Euroleague after losing at CSKA Moscow on Friday for a second time in two days, only this time it was comprehens...
BASKETBALL
Former Red Bourousis wrecks Olympiakos´s hopes for a break
Olympiakos tried harder in Game 2 of the Euroleague play-offs in Spain, and Real Madrid was not as good on Thursday as in Game 1, but the Spaniards still emerged victorious on the night with...
Inside Sports
COMMENTARY
The placebo effect and the economy
Among the greatest mistakes made in the years of Greece’s hard landing is that citizens did not get the chance to sense that aside from austerity and pain the economic adjustment program als...
COMMENTARY
Ukraine is a crisis—but not a Cold War
Given Russia’s annexation of Crimea, the imposition of US and European sanctions, and the potential for more escalation in Ukraine, we are witnessing the most important geopolitical events s...
Inside Comment
SPONSORED LINK: FinanzNachrichten.de
SPONSORED LINK: BestPrice.gr
 RECENT NEWS
1. Greek Christians mark rare Good Friday in north Cyprus
2. Eurobank share offering on April 25-29
3. Greens lose badly as CSKA Moscow
4. Former Red Bourousis wrecks Olympiakos´s hopes for a break
5. PPC to issue corporate bond of 500 mln
6. Greece offers to help find Turkish F-16 lost in 1996
more news
Today
This Week
Today
This Week
1. Greece's market return mirrors return of tourists
2. Parties start announcing candidates for European Parliament elections
3. Greece startup leaders say they can’t break jobless cycle alone
4. Ground-breaking Good Friday mass signals thaw in Cyprus
5. IMF's Thomsen says Greece not fully financed to 2016
6. Mayoral candidates clash over Athens mosque plans
   Find us ...
  ... on
Twitter
     ... on Facebook   
About us  |  Subscriptions  |  Advertising  |  Contact us  |  Athens Plus  |  RSS  |   
Copyright © 2014, H KAΘHMEPINH All Rights Reserved.