The Cannes Mousetrap

Nicolas Sarkozy, rotating President of the G20, wanted the Cannes meeting to be a show. It ended up in the rain, while world leaders had to witness how the G20 agenda got hijacked by the Greek termite, which is undermining the financial governance in the Euro zone.

Besides, the Greek crisis can no longer be confined to Europe while the non- Euro zone countries can hardly intervene further while the patient is still in surgery. They were confined to the role of outsiders and surely must have asked themselves what they were doing there. Only the American president and the UK P.M., with a few others, were marginally involved in this Franco- German-Greek “ménage a trois”.

The financial situation worldwide was in fact hijacked by a nasty turn of events in Athens. Cannes was supposed to be a remake of the delights of Capua, but Hannibal was trapped for a second time.

The attitude of the Greek Prime Minister continues to baffle all observers. He made a U-turn on the referendum. He received in extremis a majority in Parliament but meanwhile the debt deal still needs formal approval. Greece survives on a 110 billion euro rescue loan. George Papandreou now suggests a government of national unity but may very well have to give up his position as P.M. and call for new elections. His meeting with the German and French P.M.’s was more a shouting match than a tea party out of Lewis Carroll. A further complication is that the Greek crisis is more structural than transitional. The causes lie more in the “modus operandi” in Athens than in external factors.

At the same time the events laid bare shortcomings in the workings of the ECB, the Commission and the Council. The French cannot be blamed for this bummer. The less concerned participants could see for themselves that in rainy Cannes all that glitters is not gold. Madame Lagarde had to content herself with vague promises of further help for the IMF. The Italian P.M was humiliated by being obliged to have his financial policies monitored. He was sent home with a “nanny”. The Chinese president and Indian P.M. looked totally out of place, while the US president acted his usual distant elegant self, forming a strange pair with Sarkozy, who continues his Fred Astaire passes around Obama. Still, Cannes was no match for “Top Hat”.

It is time to favor plain-speaking over masks and silver tongues (in the words of Montaigne). Cannes didn’t help. The problems remain and Greece seems to opt for the Oracle rather than for transparency. Spain and Portugal are in the Emergency Room, while others might follow. Both the Fed and the ECB are obliged to work in the dark, while the banking sector remains in fact uncooperative. Meanwhile the Euro zone remains frozen as long as there is no clear signal coming from Athens. Unfortunately, something is rotten in the state of Greece.