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5/22/14

How Greece pulled back from the brink of plunging Europe into chaos - Helena Smith

It was a meal where only four of the 14 participants spoke and nobody ate. Seated in front of crystal glasses, the finest porcelain laid out before them, the German chancellor, Angela Merkel, and her French counterpart, Nicolas Sarkozy, glared at the two men on the opposite side of the table. For both leaders, entrapped in Europe's escalating debt crisis, the emergency dinner – conducted on the sidelines of the G20 summit in Cannes in November 2011 – had suddenly become a defining moment that could make or break the eurozone, the EU's most ambitious project.

Greece had never come closer to euro exit, and united Europe had never come closer to collapse. "In all my years I have never witnessed behaviour so undiplomatic," recalled Evangelos Venizelos, Greece's deputy prime minister who along with the then PM, George Papandreou, was the focus of Merkel's frosty glare.

"The climate was extremely heavy, absolutely tragic," he conceded in an exclusive interview. "And very, very aggressive."

As EU states head to the polls – amid concerns that political instability might yet open a new chapter in the eurozone crisis – revelations about just how close Greece came to being forced out of the euro have finally begun to emerge.

The disclosures have been grist to the mill of an anti-austerity opposition determined to prove that Athens had almost no say in the running of its affairs.

Papandreou had dug in his heels and, emerging from the meeting, announced the referendum would go ahead. Meanwhile, unbeknown to the Greek leader, Merkel and Sarkozy had held a joint press conference declaring that Greece had one choice, and it was "in or out" of the entire euro project.

As the prime minister's jet flew back to Athens with Papandreou slumped in his seat asleep, Venizelos worked on a statement that would ultimately be the beginning of the end of the referendum.

Within minutes of landing his eight-paragraph announcement was released. "Greece's position within the euro is a historic conquest that cannot be questioned," said the announcement. "This acquis by the Greek people cannot depend on a referendum."

It was 4.45am – barely three hours before the banks in Greece opened and nine hours after the start of the meal in Cannes. The eurozone's darkest hour was over.

Read more: How Greece pulled back from the brink of plunging Europe into chaos | World news | The Guardian

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