The Untold Story Of How Obama Almost Saved Europe

The FT's Peter Spiegel is out with an in-depth chronicle of the three nights in November 2011 when Western leaders nearly blew up the Eurozone.

Among the more remarkable anecdote in the piece concerns the role President Barack Obama played in mediating the negotiations.

Previously, Obama had the reputation among European officials for being mostly aloof to the continent's affairs, as he focused on Iraq and Afghanistan.

But U.S. officials tell Spiegel that France, the European Commission and the European Central Bank "frequently dragged" the White House into Eurozone talks to serve as a counterweight to German Chancellor Angela Merkel, who was resisting putting up more German equity into bailing out sovereigns in the Eurozone's periphery.

When Obama did finally engage, they were stunned by his mastery of the dossier. Eventually, he came to head the negotiations, at least over the session Spiegel covers:

...When eurozone leaders were summoned again by Mr Sarkozy at 9.30pm that night in Cannes, several were surprised to find Mr Obama chairing the meeting. "It was strange," said a member of the German delegation. "It was also a signal that Europe was not able to do that; it was a sign of weakness."

But Spiegel says Obama and French President Nicolas Sarkozy ended up pushing too hard on Merkel, to the point where she basically broke down. Here's how it went down late one night in Cannes

"Das ist nicht fair." That is not fair, the German chancellor said angrily, tears welling in her eyes. "Ich bringe mich nicht selbst um." I am not going to commit suicide.

...

The emotional outburst appeared to temper the American and French demands for an agreement there and then. "He saw that he went too far," one European in the room said of Mr Obama.

As the meeting adjourned, White House photographer Pete Souza snapped the above photo showing Obama giving a big brother-type squeeze to Merkel in an apparent gesture of reassurance. "The image adorned the walls of the West Wing for months," Spiegel says.

It ended up taking many more months for to resolve the crisis, and Spiegel leaves us with a cliffhanger of how negotiations proceeded from here - although we know the Eurozone stayed together.

Read Spiegel's full post here »