Eurozone Leaders Take a Step Back

Yesterday, the market rose because eurozone leaders had made “first steps” toward a “new plan” to solve the European debt crisis.

Today, those gains vaporized because a meeting to discuss the “next steps” toward that “new plan” was cancelled.


“You don’t schedule a meeting like this,” observed Byron King during a conference call this morning, “without the outcome scripted weeks in advance.”

Yes, there are exceptions, like the Reykjavik arms control summit in 1986, when former President Ronald Reagan abruptly left an arms summit with Soviet leader Mikhail Gorbachev because he didn’t want to share Star Wars missile defense research:

Reagan Leaves Arms Control Summit
When summits go off-script…

But most of the time, the luminaries don’t show up for a summit unless their minions have already agreed to something.

Little happens in Europe these days without an agreement between France and Germany. After World Wars I and II, “Teuton and Gaul would never war again,” wrote veteran foreign correspondent Eric Margolis. That’s what “European unity” has been all about.

But now German leaders are pushing for the holders of Greek government debt to take losses of up to 60%. French leaders think this would be a terrible idea… mostly because French banks would absorb the bulk of those losses.

[Ed note: The British, apparently, have opinions, too, even though they’re not part of the eurozone. Yesterday, the French president, Nicolas Sarkozy, was heard telling the prime minister of Great Britain to “shut up,” albeit in his native Gallic tongue.

“We are sick of you criticizing us and telling us what to do,” Sarkozy went on. “You say you hate the euro, and now you want to interfere in our meetings.”

There are three children in the Wiggin household. Because of similar comments made between them, we’ve taken to having them read a book called How to Behave and Why.

How to Behave and Why

Among other things, the book helps them see that getting along with each other is better than fighting… for various reasons, including, but not limited to, dividing up the misbegotten spoils of hard-won battles with their parents. ]

Addison Wiggin
for The Daily Reckoning