Felix Zulauf interview part 3: All the major cornerstones of the Basic Agreement on the European Monetary Union have been broken

The financial market expert Felix Zulauf expressed his opinion in an interview for Wirtschaftswoche Online that the only chance Greece to be back on its feet is leaving the European Union ant to abandon Euro currency. Zulauf added that after one year of chaos, Greece will stabilize through its agriculture and tourism.

What will happen if individual countries are forced to resign?

They will not be forced, but the pressure will keep increasing due to the economic depression. The people will turn against the euro and demand the resignation, in Spain and elsewhere.

Does EU wants to keep Greece tied to the the euro?

The people still assume that Greece can not be kicked out of the euro zone and the others will have to pay more and more. But this belief is naive, that will not happen. Even if other states adopt them some austerity measures or promote investment - that will not help the Greek economy to get back on its feet. Greece will emerge, that's just a matter of time.

How it would go on then?

The new currency would depreciate about 50 percent to 70 percent against the euro. In the first year they will have chaos, of course. The Greek financial system would be totally bankrupt, banks and insurance companies would have to be re-equipped with the state capital. There will be capital controls. After about a year I expect to win as tourism and agriculture to Italy, Spain and Portugal, market share and the Greek economy is recovering appropriately.

At the expense of the other euro countries?

For them, it will be even worse. But when the first leaves it will be followed by others.

Transport spending cuts and tax increases, are the peripheral countries in a direct way to the Third World, if they stick to the €?

You may say that. That's a depression. The extent of which the situation in Greece is comparable to the Great Depression in America. Only America had at that time the New Deal, large stimulus packages. On the other hand Greece gets tough austerity measures from Brussels.

The new French President wants a new deal. In addition to the Fiscal Pact is to be laced Growth Pact. Households consolidate and further contribute to growth - how does this without the additional expense?

This is wishful thinking, it does not work. If you want more growth, you can either hang up in the old Keynesian-style stimulus packages, such as investments in infrastructure. But this still drives the national debt higher. Or you can initiate structural reforms in order to be efficient, for instance through liberalization and privatization. This results in a first phase, however, mean that the economy is weakened.

Europe tries to do both. The Fiscal Pact is committed to saving ...

Will be ... but probably not ratified by all countries. Before the growth pact comes at all, the fiscal pact in fact will have died. There are signed agreements, which are to be broken again soon. All the major cornerstones of the Basic Agreement on the European Monetary Union have indeed been broken.

To be continued...