Speculators are not responsible for the current pressure on the euro, the currency is struggling because of political failures and diminished enthusiasm for the monetary union in Germany, Hans Redeker, global head of foreign exchange strategy, told CNBC Thursday.
Germany's ban against some types of short selling was designed to curb speculation, which many in the country saw as the chief reason for the declining euro and widening credit spreads, Redeker said.
But it "is a lie that this is a speculative attack," he said.
"It's political failure which brought us to this situation,” Redeker said. "First, it was wrong to allow these countries (like Greece) to get in. Second, we were not vigilant, we were covering it up, we were camouflaging it."
The euro zone is also under pressure from a new feeling in Germany that it’s time to stop funding the euro zone out of post-war guilt, Redeker said.
Part of Germany's peace strategy after World War II was to render payments to the European Union as "hidden war reparations; a guilt tax, but (the country was) willing to give it," he said.
With a new generation, there is more of a feeling of "we work hard and then we want to spend it," Redeker said.
Right now "the Franco-German engine is stuttering," he said. "And for the past 50 or 60 years, this engine had been largely fueled by gasoline made of Deutsche Marks."...
"Never trade against the locals, because locals have better knowledge," he said. "And when I see that, in Europe, people are picking up their deposits and going somewhere else, I see no reason to stand against that."
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