Crashed: How a Decade of Financial Crises Changed the World

by Adam Tooze

This, at the time, appeared to be the dispiriting upshot of the Cannes conference: the removal of the Greek prime minister, deadlocked negotiations, no aid for Italy and a further faux pas by Berlusconi. Three years later it emerged that something far more dramatic had transpired. Lagarde’s Italian proposal was a sideshow. The real news was that Paris and Berlin were maneuvering to unseat the Italian prime minister. As Geithner put it in transcripts compiled for his memoirs: “The Europeans actually approach us softly, indirectly before the thing [Cannes meeting] saying: ‘we basically want you to join us in forcing Berlusconi out.’ They wanted us to basically say that we wouldn’t support IMF money or any further escalation for Italy, if they needed it, if Berlusconi was prime minister. It was cool, interesting.”44 Geithner could not hide his approval of the basic idea: “I really actually felt, I thought what Sarkozy and Merkel were doing was basically right which is: this wasn’t going to work. Germany, the German public were not going to support, like, a bigger financial firewall, more money for Europe, if Berlusconi was presiding over that country.” Unfortunately, a further page of Geithner’s candid observations was redacted. In his memoirs, Geithner says that he informed the president of this “surprising invitation” from Europe, but concluded, “[W]e couldn’t get involved in a scheme like that. ‘We can’t have [Berlusconi’s] blood on our hands,’” Geithner told the president.