Book Recounts Political Death of Papandreou

In an upcoming book, former French Finance Minister Francois Baroin says that former Greek Prime Minister George Papandreou was warned that international bailouts keeping the country’s economy alive would be scrapped if he persisted with plans to hold a referendum on austerity measures in 2011.
In the book, Diary of a Crisis, Baroin said that the warning came in a meeting on Nov. 3, 2011 from German Chancellor Angela Merkel and then French President Nicolas Sarkozy, who said if Greeks voted it down that the Eurozone could be threatened, and that U.S. President Barack Obama was also there and demand Papandreou explain himself and why he was calling for a referendum to give Greeks a voice in the austerity measures that international lenders had decided were needed.
Baroin described how Papandreou gave in to their demands and announced that the referendum would be on euro membership, not the bailout terms.
“Papandreou sweats more, jumbles his words, then collapses. Cornered, he has no choice but to vote in favor of the euro or not. I attend his political death live.”
In the book, Diary of a Crisis, Baroin reveals a lot. According to excerpts in the magazine L’Express, he had studied in 2011 the consequences for France the collapse of the Eurozone which would be accompanied by Greece abandoning the bloc.
It was the first time a member of the French government during that period acknowledged the existence of a study about the consequences for France that a collapse of the Eurozone if Greece brought it down, especially the cost to the banking and insurance industries.
He wrote: “That moment, the new European agreement for Greece, which consisted of writing off 50 percent of its debt, is on the brink of failure. European Union is in a cyclone, the euro is being attacked from all sides.
Baroin said he had gathered “three trustworthy people” in his office in November, 2011. He said he didn’t take notes but remembered the exchange. “It comprises of imagining the darkest case of our modern economic history. It is a discussion without proof. Without traces.”
He referred to the backstage of the dramatic meeting of Nov. 3 in Cannes where the issue of the Greek referendum being carried out was put forth. “The meeting happened in a very heavy atmosphere with a lot of tension. In the meeting which lasted two hours without interruptions were officials besides the Greek Prime Minister and Finance Minister (Evangelos) Venizelos,” including Sarkozy, Merkel and French Minister of Foreign Affairs Alain Juppe, German Finance Minister Wolfgang Schaeuble, and Obama.
Baroin said Sarkozy told Papandreou: “We’re telling you straight out, if you do the referendum there will be no salvation plan.” Then, wrote Baroin, “Papandreou pretended not to understand. With a frozen look, Merkel repeated the warning. It’s a psychological war. The tension rises. Sarkozy repeats the terms to Papandreou the tone of an ultimatum.
Baroin writes, “There was a standoff between Papandreou, who was with his finance minister. Sarkozy shouted out to the Greek prime minister, ‘We tell you clearly, if you do this referendum there is no rescue package for you
He said the European leaders were hell-bent on forcing through unpopular austerity measures even if it meant throwing out the Greek government and while tension was building up inside Europe over whether Greece would leave the Eurozone and threaten the other 16 members in the bloc.
“Papandreou sweats, resists, tries to project arguments. Obama is watching what’s going on and is listening attentively. Sometimes, he summarizes things and cools the game when tension gets high. Papandreou is risking his career. He sweats more and more, confuses his words and then collapses psychologically. Cornered, he has no other choice than to say that the referendum is yes-or-no to the euro. He realizes that he cannot get away from this question by posing it to his people. I am present in his political death, live. After two hours of battling, he surrenders,” he concluded.
Shortly before the meeting, moreover, Papandreou had replaced the entire leadership of the Greek armed forces, leading to widespread suspicion that the Greek army, whose ties to US intelligence agencies go back to the 1946-1949 Greek Civil War and the 1967 CIA-backed junta, had considered launching a coup after the referendum was announced. A week later, Papandreou was replaced by a new Greek prime minister, Lucas Papademos.