Take your medicine

Rarely can a luxury dinner have been harder to digest than that which the Greek prime minister got dished up Wednesday evening in Cannes. But it was less the Mediterranean delicacies that weighed heavily in his stomach than the plain speech coming from Nicolas Sarkozy and Angela Merkel.

After George Papandreou's unilateral decision to put the hard-won EU rescue package to a popular vote, the clock is now ticking. His trip to Cannes was hardly voluntary. And if the Greeks don't irrevocably accept the conditions of the rescue package, the country will have to leave the eurozone. The choice has never been expressed with such clarity.

Yes or no to the euro

European solidarity has its price. Only those who fulfill their obligations can expect long-term aid from their European partners. The German-French tandem in Cannes has shown a rarely seen resolve from the two leaders. With their ultimate challenge, Papandreou must now decide whether to accept his Herculean task.

Anyone who quickly labels this as European tyranny is ignoring the facts. For much too long, the Greeks have been using clever tactics to leave their European partners in the dark and put off tough decisions. Now they have to show their cards. With all due respect to the democratic sovereignty of all European nations, a unified political community like the EU functions according to clear rules by which all must abide.

Risky game

Prime Minister Papandreou's referendum plan carries a high risk. It currently looks as if the Greeks could say no to the European rescue package. The hardships expected of the Greek populace will be great. The country will have to tread through a deep valley of tears before a light appears on the horizon.

But until the Greeks have explicitly accepted this rocky path to recovery, Europe cannot give another cent. Eurozone leaders were remarkably quick to agree on that yesterday. What's more, they gave the Greek government an ultimatum. If the referendum has not provided absolute clarity by early December, the endless Greek drama will have increasingly lower priority in Brussels.

Alternative European core

The political damage for Europe would be great, but bearable. Above all because the direction which leaders have chosen in Cannes sends a clear signal: The stability of the euro and the economic competitiveness of the eurozone take precedence. In a pinch, Europe will engage in the global economy with a strong core of competitive economies.

It was especially important that this was conveyed before the G20 meeting. For the euro crisis has become a litmus test which has to be assessed by the leaders of developed and emerging economies when they meet. An urgent and necessary reform of the global currency system, new harsher rules for financial markets - all that can succeed only if Europe cleans up its own mess.

Author: Daniel Scheschkewitz, Cannes / acb
Editor: Michael Lawton