Papa don't breach: Greece's Papandreou must show both Brussels and Berlin he is serious about slashing his country's ballooning deficit. Photograph: Reuters

At the World Economic Forum held in the otherwise sleepy Swiss resort of Davos in January came a remarkable sight.

During one afternoon session, the prime ministers of Greece and Spain and the president of Latvia had been invited to offer their views on the future of their economies and that of Europe as a whole. What ought to have been a measured debate turned into a sort of trial.

The three leaders up on the dais looked as if they had been arraigned like criminals having to answer for their misdemeanours before the collected representatives of global financial and economic power. The Greek leader, George Papandreou, looked haunted. He pleaded that the Greeks realised the scale of their budgetary problems and that they themselves knew that the worst deficit they had to deal with was not the 13 percent of GDP gap in the public finances but the “credibility gap” they faced in the markets.

Besides, they had not formally asked anyone for any money. Yet Papandreou still could not help himself from attacking speculators with “ulterior motives” for hounding the Greek government.

His Spanish counterpart, José Luis Rodriguez Zapatero, looked similarly ill at ease, declaring again and again, with a mounting air of desperation, that Spain’s membership of the eurozone made its economy stronger rather than the opposite.

The Latvian head of state, Valdis Zatlers, speaking for many smaller, highly exposed countries that have found themselves in difficulties – and have approached the International Monetary Fund for aid – reinforced the view that the euro was the solution, not the problem. Latvia, like most of central and eastern Europe, still wants in to the euro area. From a country that saw its economy contract by about 15 percent last year, that is perhaps the finest compliment the single currency could have garnered.

By the time of the February 11 summit of EU heads of government, called by European Council President Herman Van Rompuy, the image presented to the world was a somewhat different one. The choreography of the meeting was self-conscious; Papandreou was filmed bracketed by the leaders of the two most important economies in the zone. German Chancellor Angela Merkel and French President Nicolas Sarkozy flanked him like two very special, if unusually short, se......