ARI SHAPIRO, HOST:
This is MORNING EDITION from NPR News. I'm Ari Shapiro.
RENEE MONTAGNE, HOST:
And I'm Renee Montagne.
The European Union is facing the worst crisis in its history and it has to the potential to affect us all. The meltdown in Greece could eventually imperil the entire global financial system. Today in Brussels, Europe's leaders will make another attempt at finalizing a eurozone survival plan. But time is short and the stakes could not be higher. The key players have big national issues to worry about.
This morning, we're going to train a spotlight on some of the big nations at the heart of this thing, with the help of NPR's Philip Reeves.
And, Phil, let's shine that spotlight, first, on Italy, which seems to be focus on all the attention in the run-up in this summit.
PHILIP REEVES, BYLINE: That's right. And that's because the other day, Prime Minister Silvio Berlusconi was, in effect, given an ultimatum by Germany's Angela Merkel and French President Nicolas Sarkozy. They basically told him to get Italy's finances in order right away, and to report back on his plans to do so ahead of today's summit.
Berlusconi, he doesn't like taking orders from the French and the Germans at all. But he and his coalition partners have been working overnight to hammer out an agreement on austerity and reform plans. He doesn't have a lot of room to maneuver and his coalition has been weakened by sex scandals and court cases, and is close to collapse.
There's been some big disagreements over these reforms, particularly pensions, but it looks like they've settled that. But we don't know if he's secured a plan that'll satisfy Merkel and Sarkozy. They want concrete measures that'll convince the markets, otherwise we're back to the Armageddon scenario.
MONTAGNE: And you are in Paris. What is at stake there for the French?
REEVES: A lot's at stake, and particularly the French banks. The French-Belgian bank, Dexia, has already toppled, several others have had their credit ratings downgraded. People are worrying that eurozone contagion will reach here. The French banks are carrying a lot of Greek and Italian debt.
And the really big worry is that France will loose its triple-A rating. That will be a huge blow. It will play havoc with the grand euro survival plan that they're trying to nail down in Brussels today. It would do President Sarkozy a lot of political damage. Keeping the Triple-A almost certainly mean more belt tightening. And there's a big domestic dimension here, too, because there's a presidential election next year.
MONTAGNE: OK, let's swing our spotlight across the map to the most powerful player of them all - and that would be Germany. These negotiations are very difficult for Chancellor Angela Merkel, are they not?
REEVES: Yes. And she really is the biggest player at the table. I mean Germany is, of course, the economic powerhouse at the heart of Europe. But Merkel's position is also precarious. She's widely accused, at home and abroad, of dithering on this. Germans don't like the idea of writing an open check to rescue, what they see as, profligates southern European nations whose economies are simply not productive or competitive enough.
So she has to tread very carefully and we're seeing her do that today. Before today's emergency summit kicks off, Merkel is addressing the German Parliament. Parliament is going to get to vote today on one important part of the grand euro rescue plan, a part concerning boosting the fire power of the eurozone bailout fund.
There are some rebels within Merkel's coalition who oppose anymore bailouts. And if the vote goes against her, it would be an absolute disaster. However, all the signs are that she does have enough votes for this to pass.
MONTAGNE: And then, of course, Phil, history is not just about economic and political equations - no matter how stark they may be. It's also about ambition, rivalry, personal relations between leaders. All of which, seem to be playing out in this crisis.
REEVES: Most certainly. The sound of giant, colliding egos is echoing across Europe right now. I mean let's look at one incident. At the last summit a couple of days ago, Merkel and Sarkozy gave a press conference and they were asked about Italy's economic reforms. They exchanged a very loaded glance and smirked, particularly Sarkozy. Berlusconi was furious.
A pro-Berlusconi Italian paper ran a headline, saying: To Hell with Sarkozy. And it urged Italians to go to a laugh-in in front of the French Embassy in Rome. Now, we all know Italians are fed up with Berlusconi. But they apparently don't like the idea of Merkel and Sarkozy ganging up on him, especially while those two seem to be getting cozier.
There've been some warm photos of Merkel giving Sarkozy a teddy bear for his newborn daughter. So it's all pretty Shakespearean stuff.
MONTAGNE: Phil, thanks very much.
REEVES: You're welcome.
MONTAGNE: NPR's Philip Reeves speaking to us from Paris. Transcript provided by NPR, Copyright NPR.