This may be the most interesting story yet to have come out of the Greece bailout talks.
Sarkozy demanded “a compromise from everyone to support Greece … or France would reconsider its position in the euro,” according to one source cited by El País.
“Sarkozy went as far as banging his fist on the table and threatening to leave the euro,” said one unnamed Socialist leader who was at the meeting with Zapatero. “That obliged Angela Merkel to bend and reach an agreement.”
Why is this important? Well it’s the first time we’ve ever heard that a major European leader has threatened or intimated anything like this.
But beyond that, everyone assumed that if any country were going to quit, it’d be Germany, not France. Sarkozy used the last week before the Greek bailout to present himself as Mr. Euro, the new leader of the Eurozone. So the fact that behind closed doors he had something totally different in mind is fascinating, and definitely adds a point in favour of those who say the union remains quite fragile, even now.
Meanwhile, the euro itself seems to be getting hammered by the minute. It’s now decisively below $1.25, and $1.24 seems like a distinct possibility.
And if you don’t know why Sarkozy was so adamant about this, then you haven’t seen the list of who got saved in the Greek bailout.