James Forsyth

Merkel and Sarkozy try to hold the euro together

Merkel and Sarkozy try to hold the euro together
Text settings

Right about now, Nicolas Sarkozy and Angela Merkel are having George Papandreou for dinner. There have been all sorts of rumours today about what Sarkozy and Merkel will demand from him. Thankfully, they seem to have abandoned plans to tell him to cancel the referendum. But they still seem keen to dictate the question and the timing to him. How that will go down with the Greek demos remains to be seen.

One thing is clear, though: the euro is now destroying the whole European project. The European Union’s claim to be a force for peace, stability and democracy in Europe is rapidly disappearing into the Athens smog. The wholesale sacking of senior Greek military officers shows that there are real fears in Athens of a military coup.

Sarkozy and Merkel are reportedly keen to have the referendum ask whether the Greeks want to stay in the Euro — believing that this is the question most likely to produce a yes. But it is worth remembering, as the New York Times points out, that next year Greece’s budget will be in surplus if you exclude debt interest payments from it. This means that Greece could default and not have to return to the markets instantly to borrow funds.