And today we learn from Spanish El Pais that according to Spanish PM José Luis Rodríguez Zapatero, Nicolas Sarkozy threatened to leave the euro over the weekend unless Germany coughed up money to help Greece and other struggling euro-states. The revelation – which is being denied ferociously by everyone involved – sent the euro tumbling today.
This is what El Pais writes:
“It happened this Wednesday in a meeting with regional and provincial party members in Ferraz. [Zapatero ] gave a speech for over two hours” recapping part of “the eurogroup meeting in Brussels last week. He underlined that Sarkozy had threatened to remove France from the euro.”
It goes on,
“[Zapatero] had a bad weekend in both Brussels and Madrid. But he wasn’t the only one. The tensions experienced by the Eurogroup leaders were such that a moment arrived when they split into two fronts. On one side France, Spain and Italy. On the other side, Germany. [Zapatero] outlined to the members of the [Spanish party] PSOE [Spanish Socialist Workers' Party] ‘the unusual financial turbulences’ that Europe has seen in the last ten days. And he illustrated the complicated tension of the Eurogroup with some internal comments made by Sarkozy, which those who heard them interpretated as threats. Zapatero said that Sarkozy came to demand a ‘commitment from all to help Greece’ or France will reconsider its position on the euro.’”One of the people in the audience apparently drew the conclusion from Zapatero’s speech that “Sarkozy had hit his fist on the table and threatened to break away from the euro, which forced Angela Merkel to change her mind and reach an agreement."
Another person in the audience concluded from Zapatero’s speech that “France, Italy and Spain formed a common front against Germany, and Sarkozy came to threaten Merkel with a break in the traditional Franco-German axis."
According to the reports, Sarkozy had also said “"if at time like this, with all that is happening, Europe is not capable of a united response, then the euro makes no sense".
The expression "a week is a long time in politics" feels like an understatement all of a sudden.