Carmignac Gestion

Dear Sir/Madam,

'Welcome to the Grand Venetian'. Macao's largest casino is a faithful replica of Venice, with its pastel-coloured palazzos, canals and bridges, not to mention gondoliers ­- Chinese of course, but dressed the part - singing well-known bel canto airs.

At the end of my annual tour of China, a country whose dynamism and capacity for transformation never cease to amaze me, coming back to a broken Europe only added to my concerns. Barely six months ago, I told you that 'Given the current sovereign bond rates, the markets are being particularly kind to our governments. As the strength of the recovery needed to absorb this debt appears increasingly unrealistic, investors might become more discriminating'.

Today, the crisis in Greece is generally viewed as a minor incident, which will have to be addressed if EU-IMF intervention should prove insufficient. How can we fail to see that this crisis fundamentally undermines the euro as a misleading, harmful protection mechanism which has unduly shielded from the censure of the markets governments in the majority of euro-zone countries, whose mishandling of public finances and labour laws is overwhelming? Is it not surreal, to say the least, that the leader of the opposition in France, who gained a significant lead in the recent elections, was behind the idea of the 35-hour week?

The lessons from the Greek crisis are falling on deaf ears, while reforms that might have been carried out under relatively painless circumstances will be brutally implemented under pressure from the markets and at the price of widespread impoverishment.

It wouldn't surprise me if soon holiday brochures in Asia entitled 'Welcome to the Grand Europe' started promoting our historic cities, beautiful women and clean air (thanks to the disappearance of our industry) at bargain-basement prices due to the depreciation of our currency.

Yours faithfully,