FT Unfolds Story Behind Eurozone Crisis, Merkel in Tears



France's President Nicolas Sarkozy tore into Greek Prime Minister George Papandreou's plan to hold a referundum during the G20 summit in Cannes, France.
France’s then President Nicolas Sarkozy tore into Greek Prime Minister George Papandreou’s plan to hold a referendum, during the 2011 G20 summit in Cannes, France.

In a series of stories, London’s Financial Times unfolds the proceedings following the former Greek Prime Minister George Papandreou’s decision to call a national referendum in 2011 on the bailout package imposed on Greece by the EU and the IMF, while also addressing the other EU leaders and the decisions taken at the time.

“George Papandreou, the scion of Greece’s most famous political dynasty, had returned to Athens from one of the most consequential EU crisis summits to find his country in upheaval. On October 27, 2011 in Brussels, he had agreed to the largest sovereign default in history – a €200bn debt restructuring that cut what Athens owed private bondholders in half. But at home, he was being vilified,” the story by FT journalist Peter Spiegel says, continuing with Papandreou’s spontaneous decision to hold a referendum, and his following summon to appear at the G20 summit held at the time in Cannes, France, where he would be told to change the subject of the referendum, asking whether the country would like to stay in the eurozone, or abandon it.

“For Merkel a key issue was whether the Greeks themselves wanted to be in or out, and if there would have been a referendum and the Greeks would have decided that they want out, that would have made the path easier,” a German official mentioned, while also going into the “brutal, recrimination-filled night, one many participants would recall as the nadir of the three-year eurozone crisis,” when “Europe’s most powerful and emotionally controlled leader [was] brought to tears.”

“Das ist nicht fair.” That is not fair, the German chancellor said angrily in the presence of astonished French President Nicolas Sarkozy and U.S. President Barack Obama, tears welling in her eyes. “Ich bringe mich nicht selbst um.” I’m not going to commit suicide.

According to the article, once Papandreou and Greek Finance Minister Evangelos Venizelos arrived in the conference room, the EU leaders begun something that Sarkozy’s finance minister would write down in his journal as “psychological warfare.”

“Clearly the feeling was: We’ve done everything to help you, we’ve done everything to keep you in the eurozone, we’ve taken financial, political risk,” a member of France’s delegation said. “It’s the biggest debt restructuring in the world, ever, and now what you do is you betray us.”

Finally, European Commission President Jose Manuel Barroso and Greece’s Finance Minister intervened and eventually put a stop to Papandreou’s much-desired referendum.

“Mr Papandreou’s referendum was dead. As was his premiership,” the FT underlines.