Cannes, 04/11/2011 (Agence Europe) - Despite the political instability in Greece that put a spanner in the works of the G20 summit, the world leaders expressed support for the eurozone's plans to deal with its sovereign debt crisis (which has been raging since May 2010). On Friday 4 November, European countries seemed relieved that the referendum announced a few days earlier by the Greek prime minister, George Papandreou, was unlikely to be going ahead. The results of a vote of confidence at the Greek parliament were awaited as we went to press.
In their final press release, the world's leading industrialised countries welcomed the agreement reached by the eurozone on 26-27 October (see EUROPE 10483): “We welcome the European leaders' decision on 26 October to make the Greek debt sustainable, boost European banks, build a fire-wall to prevent contagion and lay the foundations of sound economic governance in the eurozone.” They urged Europe to put the decisions into practice very fast and support measures for Italy (see separate article).
“With respect to Europe, we came to Cannes to discuss with our European friends how they will move forward and build upon the plan they agreed to last week to resolve this crisis. Events in Greece over the past 24 hours have underscored the importance of implementing the plan, fully and as quickly as possible. Having heard from our European partners over the past two days, I am confident that Europe has the capacity to meet this challenge. I know it isn't easy, but what is absolutely critical, and what the world looks for in moments such as this, is action”, said US President Barack Obama, acknowledging that the news of the referendum in Greece had irritated many over the past few days. He said he was confident that Europe would be able to deal with the challenges and said that the EU should staunchly announce their determination to defend their common currency, which the vehicles being drawn up at the IMF (to boost the EFSF bailout fund) would help. Obama said the international community was prepared to help if necessary, fearing the spread of the crisis from Europe to the rest of the globe. The US is pressurising Europe to increase the EFSF's firepower and Obama said the US was providing ideas about how to go about this.
Nicolas Sarkozy said he was delighted at the change of attitude in Greece, where after announcing a referendum on Greece's role in the eurozone, the prime minister George Papandreou now says that a referendum is not an end in itself because the main opposition party, New Democracy, backs the European agreement reached on 27 October (see EUROPE 10488). The leader of New Democracy, Antonis Samaras, agreed to the bailout terms on Thursday on condition that Papandreou resigns and a national unity government is installed. The Greek finance minister Evangelos Venizelos is reported to have informed the chair of the Eurogroup, Jean-Claude Juncker, and EU Economic and Monetary Affairs Commissioner Olli Rehn of the decision not to go ahead with the referendum.
Sarkozy flatly rejected the claims that France and Germany were trying to topple the governments of struggling eurozone nations (Greece and Italy), saying that rules were rules and if countries refused to abide by the rules, then they were taking themselves out of Europe. He said that what was shocking was not the idea of a referendum, but the fact that Greece did not warn its partners of the plan. Why hold a referendum now rather than over the first bailout?, he wondered. (MB/transl.fl)