Ex-Bundesbank Chief: Greece Will Never Repay Debt, Bailout Deal Real Reason Was to Protect French and German Banks

Germany's Der Spiegel published a shocking interview with Karl-Otto Poehl, Bundesbank chief between 1980 and 1991 (“Mr. D-Mark,”).

Karl Otto Pöhl said that Greece may ultimately have to opt out, and that the foundation of the euro has been fundamentally weakened: "There is still danger that the euro will become a weak currency. "

Violation of Rules

Mr. Pöhl added that the bond purchases are "a violation of every rule". His message was so string, that governments in Germany had to issue a public response on the weekend, saying that "The ECB is allowed to buy government bonds in secondary markets, and will prevent inflation effects by offsetting those purchases with sales of other assets".

Selling Assets

What other assets can possibly be worth 350B Euros? There is no details of this. Selling assets worth 350B Euros will of course cause major havoc too. Or is it gold they will be 'selling'?

According to him, there are “a whole list of weak currencies that never should have been allowed into the euro,”. The treaties governing the functioning of the EU explicitly states that no country is liable for the debts of any other.

Admitting Greece was a Mistake

He is adamant that admitting Greece in the EU was a mistake. Europe should have "realized that a small, indeed a tiny, country like Greece, one with no industrial base, would never be in a position to pay back €300 billion worth of debt". Without a haircut, a partial debt waiver, it cannot and will not ever happen. So why not immediately? That would have been one alternative. The European Union should have declared half a year ago -- or even earlier -- that Greek debt needed restructuring".

The Deal Was About Protecting the Banks

He says was the deal was about protecting German banks and especially the French banks from debt write offs.