"I think that Angela Merkel has told Sarkozy that Germany will leave the euro zone unless certain conditions are met.Either the southern European states agree to a comprehensive fiscal consolidation, which means to give power over the budget to Brussels. Or they must all pay their own debts no matter how long it takes, "she says, calling the German threat to leave the euro" genuine "and" serious. "

Insight into the merkelska agenda has Philippa Malmgren received by spending much time with "people of the German Chancellor's presence."

Equally certain is she that the two of Germany accepted the road ahead is closed - and the keys thrown away.

"I do not think that the citizens of southern Europe will be comfortable with handing over their most important policy instruments - control over their own budgets. If the political leadership in Greece and Italy joining I do not believe for a second that the public will go along with it when it comes to the knowledge of what it means, "she says.

Nor savings of the magnitude that would be required to reach all the way is a way forward in southern Europe, according to Malmgren.

"I can not see that the European public will survive it. They set fire to cars already in Greece and fight with their fists in the Italian parliament, "she says.

The ECB pointed out in many places as a possible savior from the European debt crisis, by the central bank could buy bonds from the debt crisis countries or to issue Eurobonds. Philippa Malmgren is afraid of that option.

"You want the ECB to fill the European debt hole with cash," she says and continues:

"The debt burden is the same size as in the interwar period. And if we print money to pay the debt, we will create inflation," she predicts, pointing out that there will never be an option as long as Tyskand is part of the monetary union.

"The German experience of inflation is so traumatic that the Germans would never walk that road again," she continues.

If German politicians, on behalf of his constituents, has the overarching goal of keeping inflation gone, so are there other things that are important in southern Europe. Where people expect in the first place to benefit from a welfare system that meets certain minimum requirements of their politicians.

If it becomes Germany leaves the euro first, or if, for example Italy gets there before due to a single factor, according to Philippa Malmgren.

"It depends on whose contract between politicians and the public that are broken first."

Since money is not enough in Southern Europe the answer is obvious, according to Malmgren.

"I would predict that there will be Italians. They can not maintain the welfare state because they have no money for it. They have no choice. "

If Europe's most indebted countries leaving currency may paradoxically be left Germany, she says.

If, on the other hand, Germany leaving the euro, so it does not mean the end of the EU, emphasizes Philippa Malmgren similar to the euro at some bad bricks in an otherwise stable European construction.

The question is which impression that the euro will make in history.

"My guess is that our grandchildren will face the euro as the historical sample most difficult question. Currency only lasted for twelve years and nobody remembers it. "

Experts and market participants continue to hope that a Governing solution to save the currency. The reason, according to Philippa Malmgren, are of history.

"The other day I met an Austrian who informed him that his father owned one of the largest hotels in Salzburg. He sold the property and six weeks later, he could buy a pair of shoes for the money. "

This is an experience that Germans have been with their mother's milk, but others under 50 can not relate to such an experience, according to Malmgren.

"No one under 50 has seen inflation in all his life. The financial market, people tend to be under 40 or under 45 and they have absolutely no fear of inflation. "

On Wednesday: Read about Philippa Malmbergs investment advice.

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