Overheard at the G-20 in Cannes

"Monsieur Président," said Premier Hu,
"If the Greeks carry on as they do,
We would scarcely esteem
Your stability scheme,
Or the chance of financing it, too."

When President Nicolas Sarkozy, host of this week's G-20 summit in Cannes, met Premier Hu Jintao for dinner, he would have hoped to wine and dine the Chinese leader into backing the European Financial Stability Facility (EFSF) with some of his country's $3 trillion in foreign reserves. Instead, the entire project has been thrown into doubt by Prime Minister George Papandreou's call for a Greek referendum on his country's bailout. Alarmed that the referendum is likely to fail, European leaders have responded with an ultimatum, in the words of Chancellor Angela Merkel: "Does Greece want to remain part of the euro zone or not?"

European Financial Stability Negotiations

Said Merkel, "On this I agree
With Monsieur Président Sarkozy:
There's a pretty good chance
Of a downgrade for France
And political fallout for me."

Against the backdrop of the failure of the French-Belgian bank Dexia, French President Nicholas Sarkozy met with German Chancellor Angela Merkel on Sunday to resolve their differences over the path to European financial stability. The two announced to the press that a deal would be struck by the end of the month, meaning that agreement is still a long way off. France would like its banks to have access to the European Financial Stability Facility for capital support, but Germany - the biggest contributor to the EFSF - would face domestic political unrest. The Germans, for their part, would like troubled banks to draw on private or national capital sources, but France might face a downgrade if it tried to shore up its banks on its own. A Franco-German agreement is key to resolving the Greco-Italo-Hispano debt crisis that grips Europe.

At the Irish Bailout Talks

Said Frau Merkel, "Now that we've shown 'em
All the euros we're willing to loan 'em,
Will all the E.U.
Come to do as we do,
Or 'e pluribus confusionem'?"


The European Union agreed on an $89 billion financial rescue package for Ireland, but the markets have not been calmed, fearing that questions of fiscal uniformity and further defaults in the Union have been left unanswered.

Urgent EU Consultation

Said van Rompuy to Merkel: "I task you
With assuring Athenians' rescue."
"It doesn't look rosy," 
Said she to Sarkozy,
"But are bailouts the answer? I ask you!"

Mr. Papandreou's Siren Song

"Greek austerity plans are a winner,"
Said George P., as he sang for his dinner;
With Frau Merkel to shore up
Support within Europe,
He warbled, "Ich bin ein Berliner."