French President Nicolas Sarkozy will hold emergency talks today with European leaders in a last-ditch bid to salvage his G20 meeting following the Greek referendum turmoil.
Mr Sarkozy’s summit on the Cote d’Azur now will see the French president end his year as leader of the world’s main industrial and developing nations in the reduced position of trying to convince counterparts from the US, China, Brazil and elsewhere that Europe has not lost the plot when it comes to resolving its two-year old sovereign debt crisis.
Mr Sarkozy will meet German Chancellor Angela Merkel and top European Union officials as well as the head of the International Monetary Fund before dinner with Chinese president Hu Jintao.
Afterwards, the Europeans will hold another meeting, this time bringing in Greek Prime Minister George Papandreou. Greece is not part of the G20.
European leaders had been counting on China to use its financial muscle as holder of the world’s largest foreign currency reserves to bolster the revamped euro rescue plan that EU leaders thrashed out in difficult all-night negotiations just a week ago.
The Cannes meeting was to be Europe’s chance to explain to the world that it had finally taken the tough decisions necessary to bring the debt crisis under control, which has seen three countries, Greece, Portugal and Ireland bailed out and has shown alarming signs of spreading to the much-bigger economies of Italy and Spain.
That is now a hard sell in the wake of Mr Papandreou’s unexpected decision to put the plan to a referendum, where approval by Greeks worn out by successive rounds of tax hikes and wage cuts is anything but assured.
India’s Prime Minister Manmohan Singh left no doubt what world leaders expect of Mr Sarkozy and his European colleagues at the summit.
He called Europe’s ongoing crisis “the principal source of concern for the global economy”.
“It is imperative that the difficult decisions needed to address the economic challenges in Europe and elsewhere are taken swiftly,” he said.