How the Euro Was Saved

She was torn over Grexit

Mr Sarkozy summoned his closest advisers for an emergency meeting at the Elysée Palace. According to a person in the room, the French president’s initial reaction was to force Mr Papandreou to reverse course: that either he accept the new bailout conditions immediately or Greece would be forced out of the euro.

But Henri Guaino, a Sarkozy confidant and speech writer, noted Charles de Gaulle himself preferred referendums to parliamentary politics. Asking Mr Papandreou to cancel a plebiscite would go against their Gaullist traditions, he argued. So Mr Sarkozy came up with a compromise: Mr Papandreou could go ahead with a referendum – but not on the bailout.

Mr Sarkozy called Ms Merkel and agreed a strategy. They would summon ...