by Michael Schuman
Time
November 3, 2011
Talk about drama. German Chancellor Angela Merkel, French President Nicolas Sarkozy and Greek Prime Minister George Papandreou emerged from an emergency meeting on Wednesday evening with a bombshell: Greece will have to decide if it wants to remain in the European monetary union. Merkel and Sarkozy suspended all further bailout funds until that fateful choice is made.
What a shocker. The whole idea of a member of the euro zone bolting the union has been completely taboo, even as a debt crisis has raged through Europe for two years. There isn't even any mechanism in place through which a country can exit the monetary union. The fact that this possibility has even been mentioned is a major break with the past that leaves the future very uncertain.
What happens now? Hard to say. It seemed that a referendum Papandreou had called for on Monday to seek public approval of Greece's participation in the latest euro zone bailout scheme, agreed to last week at a summit of European leaders, would be transformed into a vote on the country's continued membership in the monetary union itself. But events in Athens are changing rapidly and unpredictably. Papandreou may lose a confidence vote in parliament on Friday as his supporters melt away over his referendum plan. That raises the possibility of the Greek government falling and possibly a new election being held. Greece's future in the euro zone will remain an unknown as long as the country's domestic politics remain in turmoil.
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