G-8: Obama and Hollande Face Merkel

The immediate purpose of the “union” unfolding between Hollande and Obama regarding growth is to face the possibility of Greece’s exit from the eurozone.

While Angela Merkel thinks that Greece’s exit from the eurozone would be manageable, Obama fears that this might trigger a major crisis in Europe, which would quickly spread to the U.S. and ruin his chances of re-election in November. This is the reason why the U.S. president supports Hollande’s stance and wants the G-8 to give priority to the Greek crisis.

This Franco-American union risks antagonizing the German chancellor, who would like the June 17 legislative elections in Greece to be a referendum on the euro. (The Greek translation of her proposals seems to have caused some misunderstandings in Athens….) This implies that a Greek “no” to the euro would be followed by Greece’s exit from the EU. Such a precedent would open a Pandora’s box and risk triggering a dismantling of the eurozone. It’s a risk that Paris (supported by Washington) is not ready to take, even if it means showing “solidarity” and relaxing the conditions made in Athens, which Berlin does not want to hear about….