Sarkozy Threatens to Leave the Euro

Fight disinformation: Sign up for the free Mother Jones Daily newsletter and follow the news that matters.

Megan McArdle passed along an El Pais story yesterday saying that French president Nicolas Sarkozy threatened a week ago to abandon the euro unless Germany agreed to a French plan to rescue Greece. This didn’t seem to pass the smell test to me, so I skipped past it. But today the Guardian confirms it:

Nicolas Sarkozy threatened to abandon the euro unless Angela Merkel dropped her hostility to the EU’s €750bn safety net for the single currency, sources in Brussels and European capitals said yesterday….”It was a standup argument. He was shouting and bawling,” said one official in Brussels. “It was Sarkozy on steroids,” said a European diplomat. “He’s always very energetic. This time he was very emotional, too.”

….Diplomats at the time reported that the summit was going very badly and would continue through the night. But it ended half an hour later after Sarkozy abruptly announced he was leaving. “Sarko said: ‘For me it’s over. I’m stopping this if we can’t agree,’ ” said a diplomat.

I doubt that Sarkozy was even nominally serious about this, but as Megan says, this is a big deal anyway. It shows both that dissolution of the euro isn’t entirely unmentionable and that Germany’s opposition to the Greek bailout was stronger than anyone thought. The former, I suppose, was inevitable, and the latter actually makes it more likely. As Paul Krugman says, it’s hard to think of any other solution to Europe’s problems. Even defaulting completely on its debt wouldn’t really help Greece much at this point.

Question: is there any way to artificially “adjust” a country’s exchange rate in the eurozone? I don’t see how, but maybe there’s some clever synthetic way of accomplishing the same thing as a currency devaluation without leaving the euro. Has anyone heard of such a thing?

FOLLOW THE MONEY

Corporations and billionaires don’t fund journalism like ours that exists to shake things up. Instead, support from readers allows Mother Jones to call it like it is without fear, favor, or false equivalence.

And right now, a longtime friend of Mother Jones has pledged an incredibly generous gift to inspire—and double—giving from online readers. That's huge! Because you can see that our fall fundraising drive is well behind the $325,000 we need to raise. So if you agree that in-depth, fiercely independent journalism matters right now, please support our work and help us raise the money it takes to keep Mother Jones charging hard. Your gift, and all online donations up to $94,000 total, will be matched and go twice as far—but only until the November 9 deadline.

$400,000 to go: Please help us pick up the pace!

payment methods

FOLLOW THE MONEY

Corporations and billionaires don’t fund journalism like ours that exists to shake things up. Instead, support from readers allows Mother Jones to call it like it is without fear, favor, or false equivalence.

And right now, a longtime friend of Mother Jones has pledged an incredibly generous gift to inspire—and double—giving from online readers. That's huge! Because you can see that our fall fundraising drive is well behind the $325,000 we need to raise. So if you agree that in-depth, fiercely independent journalism matters right now, please support our work and help us raise the money it takes to keep Mother Jones charging hard. Your gift, and all online donations up $94,000 total, will be matched and go twice as far—but only until the November 9 deadline.

$400,000 to go: Please help us pick up the pace!

payment methods

We Recommend

Latest

Sign up for our free newsletter

Subscribe to the Mother Jones Daily to have our top stories delivered directly to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate