Friday, May 14, 2010

France Threatened to Quit Euro: Bailout or Else; Euro Collapsing

The Guardian today reports that Spain's Prime Minister Zapatero revealed that France threatened to pull out of the euro if other EU countries, especially Germany, did not agree to rescue Greece. The revelation occurred at a closed-doors meeting of leaders from his Spanish socialist party on Wednesday.

"The French president made his startling threat at a Brussels summit of EU leaders last Friday, at which the deal to bail out Greece was agreed"

According to the report, Sarkozy demanded "a compromise from everyone to support Greece ... or France would reconsider its position in the euro,"

"Sarkozy went as far as banging his fist on the table and threatening to leave the euro," "That obliged Angela Merkel to bend and reach an agreement."

"France, Italy and Spain formed a common front against German and Sarkozy threatened Merkel with a break in the traditional Franco-German axis."

Spain's El PaĆ­s quotes Sarkozy as having said, that "if at time like this, with all that is happening, Europe is not capable of a united response, then the euro makes no sense".

USD $1T later, the Euro is back well below pre-bailout levels:

Yesterday our straddles were up 306% already.

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