The EU, the crisis, and the threat of financial market meltdown

Cazenove's chief investment officer (CIO) Richard Jeffrey delivers his verdict on how the threat of financial market meltdown is being used by all and sundry across Europe to get their own way.

In Haruki Murakami's recent trilogy, 1Q84, intermingled with the real world, there is a parallel world in which a small number of people see two moons - and the natural laws of nature are, in some respects, suspended. I would not want to push this analogy too far, but it's not unhelpful to regard developments in the euro area as taking place in a parallel world in which the normal rules of financial and economic conduct seem to be in abeyance. Another and perhaps more mainstream way of analysing events is to use game theory. In essence, there are three main participants in the euro crisi...