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Nicolas Sarkozy threatened to pull out of euro over Greece row

15 May 2010 01:58 (UTC +04:00)

Baku â€“ APA. President Nicolas Sarkozy threatened to pull France out of the European single currency unless Germany helped bail out Greece’s economy and the wider euro zone, it has emerged, APA reports quoting â€œThe Telegraphâ€.
The French President slammed his fist on the table while making the threat to tear to apart the EU last Friday at a crisis summit of euro zone leaders, diplomatic sources have confirmed.
The details of the row leaked out after Jose Luis Rodriguez Zapatero, the Spain’s Prime Minister, recounted the summit’s events to members of his Socialist Party on Wednesday.
President Sarkozy, who is of Greek ancestry, demanded a "commitment from everyone to support Greece or France would reconsider its position in the euro," according to one source.
Another described how the French president smashed his clenched fist down to make his point as he declared: "If at this point, given how it’s falling, Europe isn’t capable of making a united response, then there is no point to the euro".
The EU and International Monetary Fund released payments for a Â£96 billion euro rescue plan for Greece earlier this week, following the summit.
Euro zone leaders, cornered by the French President’s threats in the early hours of May 8, also agreed to raise an additional fund to support the other 15 members of the EU’s single currency as well as Greece.
On that basis, EU finance ministers meeting in emergency session agreed to collect a Â£378 billion war chest of emergency loans from euro zone governments at an equally tense and bad-tempered all-night meeting two days later.
Angela Merkel, Germany’s Chancellor, whose government must shoulder most of the burden for Greece and the euro zone, resisted committing to the new plan, which will cost German taxpayers at least Â£106 billion on top of Â£19 billion paid to the Greeks.
Mr Zapatero told his party comrades that France, Italy and Spain had formed a "united front" against Germany and that Mr Sarkozy had threatened to break up the historic France-Germany "axis" that has been the cornerstone of European integration for more than five decades.
After the French President’s angry words, Mrs Merkel changed her tune and reached an agreement, said the Spanish sources.
Official spokesmen in Paris, Berlin and Madrid have insisted the reports are "lacking in any foundation".
However, other European diplomats involved in the negotiations have confirmed to The Daily Telegraph that the account is "more or less correct".
In response to Mr Sarkozy, Chancellor Merkel has demanded changes to the Lisbon Treaty in order to give the EU new powers to avoid another Greek crisis, a prospect that alarms the Elysee because France would have to hold a referendum.
"We have a shared currency but no real economic or political union. This must change," said Chancellor Merkel on Thursday. "We have to view the crisis as a motive, to make up for failures â€“ failures that were not remedied by the Lisbon Treaty."
Despite the massive bail-out package, the euro yesterday tumbled to its lowest level in 14 months against the dollar, amid speculation that austerity measures by EU states including Greece, Spain and France will undermine economic growth.