Greek Prime Minister George Papandreou delivers a speech during a debate prior to a vote of confidence in the parliament in Athens November 3, 2011.
Credits: REUTERS/Yiorgos Karahalis
CANNES, France - A day of high economic and political drama across Europe ended Thursday with French President Nicolas Sarkozy linking the world wars of the last century to the current crisis threatening European currency unity.
For his part, Prime Minister Stephen Harper urged G20 leaders meeting here to think about a backup plan if a unity-saving bailout deal falls through.
The European common currency, the euro, is under threat because of the Greek debt crisis and Greek domestic political gridlock. A week ago, European leaders agreed to a comprehensive bailout plan which would have given Greece - bankrupt in all but name - access to about about 160 billion euros; pumped about as much into European banks which have made lousy loans to Greece, Spain, Italy, and Portugal; and boosted a European-wide "stability fund," which other European countries could tap to help solve their problems.
But that bailout plan was at risk of unravelling when Greek Prime Minister George Papandreou abruptly announced he would put it to a referendum.
After being read the riot act here by Sarkozy and German Chancellor Angela Merkel late Wednesday night, Papandreou returned to Athens, held an emergency meeting with his cabinet, and then appeared to reverse himself, saying he would take the referendum idea off the table if his political opponents would back the bailout plan.
Papandreou's government faces a confidence vote Friday.
"My expectation is that cooler heads will prevail and that package will be accepted," Harper said.
Meanwhile, Sarkozy and Merkel made it clear that saving the euro was more important than saving Greece.
"The euro is the very heart of Europe," Sarkozy said Thursday. "We cannot accept the explosion of the euro because that would mean the explosion of Europe."
Sarkozy said the euro binds together the members of the European Union and it was that lack of unity in Europe that lead to the First and Second World Wars.