A crisis? Call the F-team

By The Economist | Cannes

SOME European delegates walking around the G20 summit in Cannes can be seen sporting an unusual badge: Groupe de Francfort.

The Frankfurt Group, or GdF for short, is the latest addition to the proliferation of international political groups, the G7, G8 and the G20, among many. Consisting of the leaders of Germany, France, the Eurogroup of finance ministers, the European Central Bank, the European Commission and the International Monetary Fund, the F-team has quickly established itself as the cluster managing the euro's crisis. It has no legal structure or secretariat, but it is now the core within Europe's core.

It was born by unhappy coincidence at Frankfurt's old opera house on October 19th, on the occasion of a farewell party for Jean-Claude Trichet, the former president of the European Central Bank (ECB). This was meant to be a grand sending-off, with a farewell concert, drinks reception and laudatory speeches from Europe's political elite. Angela Merkel, the German chancellor, was among those in the front row.

But soon the atmosphere soured. Wheeled on to the stage, Helmut Schmidt, the former West German chancellor, indignantly told the audience that the failure of the current generation of politicians was a far greater threat to the future of Europe “than the indebtedness of individual states.” Then came news that Nicolas Sarkozy, the French president, would fly in even as his wife was in hospital, about to give birth to their daughter, Giulia.

While the orchestra conducted by Claudio Abbado struck up its performance of Mozart, the leaders gathered in a backroom of the opera house to prepare for the upcoming European summit on October 23rd that was meant to resolve the crisis once and for all. But the debate soon turned rancorous. Mrs Merkel rejected Mr Sarkozy's push to boost the euro zone's bail-out fund by allowing it to borrow money from the ECB. Mr Trichet was, if anything, even more vehemently opposed to the idea. By treaty, the ECB is forbidden from lending money to governments. The ECB president, it is said, abandoned his customary English for his native French, the better to argue with Mr Sarkozy.

The incoming ECB president, Mario Draghi, quickly returned to the main event to listen to the concert. Two hours later, Mrs Merkel slipped out of a side door. Mr Sarkozy stormed out the front, with key aides running to keep up with him. “I was surprised by the depth of disagreement," said one participant.

Plainly the summit would be unable to reach a deal. But instead of cancelling it, euro-zone leaders decided instead to call a second one three days later. Each summit, moreover, was split into two gatherings: one for the EU's 27 leaders, followed by a smaller meeting of the 17 euro-zone members. If only multiplying the power of the EFSF were as easy as multiplying meetings—and political acronyms.

But somehow, around 4am on October 27th, European leaders finally announced a “comprehensive set of additional measures reflecting our strong determination to do whatever is required to overcome the present difficulties”.

The deal, however, was full of holes that must now be filled quickly, given the political chaos in Greece (see my earlier post and column) and the prospect that it might default in the coming weeks.

The Frankfurt Group is steering the effort to complete the new firewall “at an accelerated pace”. It is not as unwieldy as the 17-strong Eurogroup of finance minister, but more legitimate the duumvirate of Germany and France. Sometimes the F-team summons others for a dressing down, as happened with the Greek prime minister, George Papndreou, on November 2^nd. Sometimes outsiders are invited to assist, such as the American president, Barack Obama, who joined discussions the following evening. That stamp of approval will ensure that GdF is here to stay.