Speculative Attack on Euro 'a Lie': Strategist

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.

Euro bills
Euro bills

Germany's ban against some types of short sellingwas 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."

Hidden War Reparations

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."

Follow the Locals

And talk for the euro rebounding to $1.40 is unfounded and the single currency will remain weak for "a prolonged period of time," Redeker said.

"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."

Overall, it’s "in all our interests" to keep the euro together, but it will take lots of discipline, he said.

Asked if he’d rather be paid in pounds or euros, he replied: "give me dollars."

- Watch Hans Redeker interviewed on CNBC above.

Slideshow: Where Would Pre-Euro Currencies Trade at Now?