Europe has a new “informal directorate ” which aims to find a solution to the sovereign debt crisis. The so-called “Frankfurt Group” composed of leaders of France and Germany, European Commission President, Head of the European Council, European Central Bank governors (ECB) and the IMF, the leader of the eurozone finance ministers and European Commissioner for Economic and Monetary Affairs, has assumed the leadership of the euro area for the past several weeks, writes Thomson Reuters news agency.
The new political bureau met four times during the G20 summit in Cannes last week and has sent an ultimatum to Greece that will not get even a cent unless its commitments to Europe will be met and forced Italy to adopt austerity measures under the supervision of IMF. It all started with heated discussions that took place at the Opera in Frankfurt on October 19 marking the departure of Jean-Claude Trichet as the head of the ECB.
Given the fact that the Greek debt crisis continues to worsen, the European banks are weak and panicked investors panic are giving up government bonds, French President Nicholas Sarkozy rushed to meet with German Chancellor Angela Merkel. Since then, a discussion group was formed around them that meets regularly and aims to build a bridge across the ideological gap between northern and southern Europe and between supporters of orthodox German fiscal discipline and an independent central bank which has the sole objective to fight against inflation and the supporters of an economic and monetary union, more integrated and more extended. IMF Director Christine Lagarde presence gives the group credibility with investors on financial markets and checks the availability of international creditors to help the euro area.