Saxo Bank CEO Says Euro Doomed as Single Currency Woes Resurface

By Mahmoud Kassem - Feb 17, 2013 10:39 AM GMT+0200

Wal-Mart Executives Sweat Slow February Start in E-MailsQ

Saxo Bank CEO Says Euro Doomed as Single Currency Woes Resurface

By Mahmoud Kassem - Feb 17, 2013 10:39 AM GMT+0200

http://www.bloomberg.com/news/2013-02-17/saxo-bank-ceo-says-euro-doomed-as-single-currency-woes-resurface.html

Bloomberg

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 in an interview today 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.

“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.

To contact the reporter on this story: Mahmoud Kassem in Abu Dhabi at mkassem1@bloomberg.net

To contact the editor responsible for this story: Dale Crofts at dcrofts@bloomberg.net