I have just read a riveting book that I think is relevant to what is going on with the Brexit negotiations. It is called 'Adults in the Room' by Yanis Varoufakis, the former Greek finance minister who later resigned. I strongly recommend anyone to read it and unlike the title and subject matter suggests it is very well written and in parts reads like a thriller as the events unfold.

The book tells the story of how Varoufakis tried to negotiate a restructuring of Greece's debt which the EU was insisting should be paid off in full by deflating the economy and insisting on punitive measures such as cuts to pensions and sales of precious state assets. When his party was elected in power it was given a mandate to what Varoufakis wanted and the main body of the book is about how the EU used all its weight to prevent it happening. As the book cover says it is a tale of hypocrisy, collusion and betrayal that shows the extraordinary lengths that the EU went to in order to preserve the facade of unity and prevent other peripheral countries, such as Italy and Spain, seeking write-offs of their debt.

The book focuses on the negotiations with the main players in the EU government and many of the same politicians are now involved in talks about Brexit. Given what happened with Greece the progress of the talks does not fill me with much hope about the outcome of the Brexit talks. What is clear from book is that the EU has invested huge political capital in the European Union and the Euro currency and nothing must be allowed to undermine. If Greece had been allowed to restructure its debt (something the IMF supported) then it could have had a domino effect with other weaker Euro currency nations. Brexit was a huge shock to the EU elite as, like Trump's election, it was not considered a realistic outcome. Now it has happened the EU politicians will do what ever is necessary to prevent the UK from getting a reasonable deal as it may encourage other EU nations to leave.

On this basis a 'no deal' outcome is a higher probability than the media supposes. This would favour the EU as it would deter other nations from entertaining thoughts of leaving the Union. However, because…

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