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This weekend was meant to be the moment when Europe's leaders saved the world. They were supposed to come together on Sunday in Brussels at a European Union Summit and, led by France and Germany, they would unveil a grand plan to end the eurozone debt crisis.
Well, it hasn't worked out that way. But still, the next few days are crucial, as NPR's Philip Reeves reports from a cafe in Paris.
PHILIP REEVES, BYLINE: The French never let a crisis spoil a weekend. In the Grandpalais café, off the Champs-Elysees in Paris, there's a mood of anticipation, of excitement. The working week is over. The wine is flowing. People are looking forward to a couple of days' sport and food and family fun. They seem unperturbed by the fact that their fate depends on what happens this weekend and the days that immediately follow.
Summits in the European Union come and go. Usually, nothing much changes. Yet Marie Diron, a senior economic advisor to Ernst and Young, says this summit really matters.
MARIE DIRON: There's a feeling that we're running out of time and I think that's what we're hearing from the U.S., from the IMF that really by now we need to stop dithering. We need to stop arguing and discussing and we need to come up with one mass plan that really solves this crisis once and for all.
REEVES: There's no sign the arguing is going to stop. France and Germany are still haggling, so there'll be yet another summit Wednesday.
NGAIRE WOODS: They've got to agree on Greece and what to do with Greece. They've got to agree on what to do to recapitalize the banks. They've got to agree on how to assure the sovereign creditors in Europe.
REEVES: Professor Ngaire Woods is director of the Global Economic Governance Program at Oxford University.
WOODS: The reason you need a solution really fast is because, if the Greek situation collapses without the Europeans having recapitalized their own banks and created firewalls, then we have a European-wide crisis because there will be a huge rush out of both government instruments and banking finance in all the periphery countries, but particularly large important ones, like Italy and Spain.
REEVES: As afternoon fades to evening outside the doors of this cafe, Paris stands stately, prosperous and elegant. In much of northern Europe, the crisis is a threat, even in France, says Max King, a portfolio manager with Investec Asset Management.
MAX KING: France is getting into trouble and the problem is that France has mounting debts. It has a very high and intractable fiscal deficit. It has a banking system which is in severe trouble.
REEVES: France's wobbly economy is a big factor. It's why French President Nicolas Sarkozy and Germany's Angela Merkel can't agree over a eurozone rescue plan. Take recapitalizing the banks. That's a big part of the eurozone survival plan. There's a huge hole in Europe's banking system right now, some $270 billion, if you believe the IMF.
If Greece messily defaults, some European banks will be in big trouble. The Germans want individual nations to cover the recapitalization funds. The French can't afford that, so they want a European-wide solution.
Hans Stark, an expert on the E.U. at the French Institute of International Relations, thinks the French and Germans will agree in the end, because he says the consequences of failure are too severe. But it won't end there, says Stark.
HANS STARK: Don't think that this plan might solve the crisis, which is the consequence of nearly 20 years of economic and financial and budgetary mismanagement. We definitely need the further step and a big one, a very deep step into economic integration.
REEVES: The long-term economic and political integration of Europe is the issue at the heart of this crisis. Arguments on that one will surely drag on for ages, which is why the Parisians enjoying themselves in this cafe on this autumn evening are quite right, never to let a crisis in Europe spoil un bon weekend.
Philip Reeves, NPR News, Paris. Transcript provided by NPR, Copyright NPR.
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