Chapter 05 - Frankfurt - Fast Money and French Ladies

Chapter 5. Frankfurt

Sophie was ushered into the office of the President of the European Central Bank. She was nonplussed to see Jürgen Kretschmer standing to one side. This was supposed to be a private meeting, she thought. Mario Draghi came around from behind the desk with a big smile on his face and a welcoming hand and arm.

“So nice you could come, Sophie,” said the courtly Italian. “You know Jürgen, I believe?” He guided her into a waiting chair.

“Yes, he’s a partner in my significant other’s hedge fund, Bermuda Triangle.”

“Yes, I read all about them in the Snowden Papers. An amusing group of fellows,” said Mario.

Sophie frowned. Thank God the emails had referred to her by a code name; otherwise her cover would have been blown for all political time, she thought. She smiled at Jürgen and said, “Nice to see you, Jürgen.” He gave a dour nod.

“I’ve asked Jürgen to open up an informal backchannel to the Bundesbank…we may need some flexibility in the days ahead…”

“Yes, Jürgen knows the back corridors of Frankfurt,” said Sophie. Draghi was sending the right emissary: fight pessimism by sending a good pessimist, she thought. Jürgen could darken a room.

“Now, now, let’s all sit down and hear what you have to say about Berlin,” said Mario.

“Manage the crisis this week…wait upon the results of the referendum…” Sophie summarized.

“Probably doesn’t matter this week.” said Mario. “We’re keeping a small flow of euros going into the Greek ATMs until after the referendum.”

“Do they know how much?” asked Sophie.

“No,” said Mario. “It’s ambiguous.”

“Umm,” hummed Sophie, seeing the wisdom of the approach. A little drip torture.

“A quiet week for us,” added Mario. “And afterwards…some fireworks…”

“Wolfgang wants to move ahead with more euro integration. Following banking union, he wants joint institutions, including a permanent administration and a eurozone parliament,” said Sophie.

“The ECB really wants that, too,” said Mario. “We can’t carry the whole load.”

“I’ve known Wolfgang for a long time,” said Jürgen, “he makes plans. He is a thinker about Europe’s future, how to strengthen the eurozone…that’s simply something Angela doesn’t do.”

“Yes, the great irony,” said Sophie, “Wolfgang is really the face of the new Europe.”

“And you’re his beautiful muse, Sophie,” said Mario with the smooth Mediterranean charm cultivated in his years at Goldman Sachs.

Just then the iPhone vibrated in Jürgen’s pocket. He pulled it out and said, “Excuse me.” He got up and walked to the far end of the spacious office. He started to listen. His brow furrowed.

Nothing unusual about that, thought Sophie. Jürgen’s brow always furrowed.

“Ja,” said Jürgen into the phone and punched the screen and put it back into his pocket. He walked back over and said, “I must confess that I should exit this conversation or I might find myself in a conflict of interest. Embarrassing. I’ll get it sorted out.”

Sophie gave him a riveting look. Did Bermuda Triangle take a position on Greece? She looked at Jürgen again and noticed the pained look. Yes, she was right. Dieter had jumped the tracks.

“Fine, Jürgen,” said Mario. He looked at his watch. “Why don’t you accompany us down the hall? I have a press conference and then I can finish up with Sophie later.”

“I can’t be seen with the press,” said Sophie.

“I understand,” said Mario. “But we all can all tie up a few loose ends in the hallway for a while on the way—it’s a long ways across the building.”

The three got up and walked out the door; Mario’s press aide joined them, and then the four started down the hall way leading to a briefing room. As the four were walking down the hallway accompanied by two security aides, Sophie suddenly saw videos ahead and journalists with red press IDs around their neck.

“Oh, no,” she gasped and wheeled in front of Jürgen, bumped him hard , turned him around, and started to push him down the hallway, saying in a low shout, “Run.” They two of them took off down the hallway.

One of the journalists yelled, “There they are.” He grabbed his cameraman and started off at a dog trot down the hallway after Sophie and Jürgen.

Another journalist turned on Draghi and asked accusingly, “Who is she?”

“Oh, just a lady friend,” said the bemused and debonair Draghi as his press aide blanched.

“It’s another Valérie Trierweiler,” screamed the journalist, referring to the once scorned former mistress of French President Hollande.

“No, Julia Gayet,” shouted another journalist, mentioning the current mistress of the French president.

The two journalists roughly pushed past Draghi’s two security aides and started running after the other two journalists, with a horde of journalists and cameramen following en masse.

Draghi watched with open-mouthed amazement as the press pack barreled down the hallway, screaming and shouting, “The mistress…the story of the year…Pulitzer Prize time…” Draghi pulled his press aide over by the arm and said, “We have to remember this public relations ploy for the next crisis.”

Sophie ran down the hallway pushing Jürgen in front of her and screaming in his ear, “Faster, Jürgen, they’re gaining.”

Suddenly from around the corner came a squad of a half dozen blue-uniformed security police pulling out their batons and tugging down their plastic visors. The squad was running full-throttle forward, boots thundering on the marble floors. They rushed past Sophie and Jürgen and piled into the oncoming journalists shouting, “Back you ruffians…down you brutes…” as they shoved offending camera lenses towards the ceiling and grabbed reporters by the collar. Shouts went up from the security police in a half dozen languages, “Stop, arretez, verboeten…” The security police commiserated with one another as they slowly mastered the situation: “Worse than the football hooligans, I dare say.” The police herded the press pack back down the hall towards where Draghi and his press aide were standing.

Sheepishly the journalists assembled in a semi-circle around Draghi, the security police in an even wider circle standing behind them, tapping their batons into black- gloved hands.

Like the professor he had once been, Draghi began, “Now, about the ATMS in Greece…”

In a far corner of the executive suites of the ECB, Jürgen and Sophie stopped and caught their breath. “This secret emissary stuff is more arduous than I thought,” said Jürgen. “Do you do this often, Sophie?”

“Yes, but usually through a back corridor to a small conference room. It’s important not to be recognizable to the press…or they speculate.”

“Yes, well as Mario said, I’m off to the Bundesbank to see Jens Weidmann. And you?”

“I’m simply keeping communications channels open this week. Paris, Brussels, and Berlin are not all on the same page…I’m smoothing things over,” said Sophie.

Jürgen laughed and said, “Yes, a few pot holes on the road to ‘ever closer union,’” referring to the key goal of the European Union founding treaty.

“More than that. This crisis has the feel of something different…something more ominous,” said Sophie. She looked at him with a face drained of her characteristic optimism.

Jürgen’s expression fell. For Sophie to say something like that was serious—it screamed inflection point in Dieter-talk, he thought. “I’m on my way to the Bundesbank…I’ll scout out the atmospherics.”

“Let me know,” said Sophie and she took off down the hall.

Bundesbank

In a corner office with a sweeping view of Frankfurt sat Jens Weidmann behind a large desk. Jens was president of Deutsche Bundesbank, the German central bank. Jürgen sat across and said, “Jens, Mario is simply asking for a little quiet this week as they keep a minimum amount of euros flowing into the Greek ATMs.”

“It’s all lost money,” said Weidmann with a hopeless tone to his voice, a bleak look on his face.

“Time is working for the eurozone, Jens. Each day that goes by on the sixty euro diet reminds the average Greek citizen what the future might look like.”

“And each day the average German citizen stews in the angst that another fifty or sixty billion euros is going down the euro drain,” adding in a voice dripping disdain, “for that euro trash…”

“The decision on whether Greece stays or exits the euro is a political decision…to be taken at the highest political level…Mario understands this to his fingertips…it is not the time for the banks to get in front of the political level…your bank or his…”

“Jürgen, we’ve been friends a long time, and I want to tell you…this is not the Bundesbank sending messages to Berlin…some of us hard money guys looking in the rear view mirror pressuring the political leaders…”

“What are you driving at?” asked Jürgen catching the different tone in Jens’ voice.

“The political leadership…in the chancellery…in the ministries…and in the Bundestag…is pressuring the bank to deliver the message.”

“The bank is being pressured?” asked Jürgen, a look of perplexity crossing his face at this unexpected news.

“Yes, from the highest levels…the politicians are pushing the Bundesbank…hard. I’ve never seen the politicians so angry…so resolute…so implacable…”

“Well, nevertheless my understanding is the ECB will hold steady…”

“Yes, but when it comes time to deal, Jürgen, you better tell Mario that it will not be easy…some people are going to get pushed to the wall…”

“Yes, there has been an erosion of trust,” said Jürgen thoughtfully.

“Trust?” spat out Weidmann. “I’d say out-and-out lying to Angela’s face…”

“Oh, huh,” said Jürgen with a gulp. “I see your point. That bad?”

“Worse. Deliver the message,” said Jens with a sigh of resignation.

“Consider it done,” said Jürgen as he got up to leave.

“And not just to Mario. Tell your friend Sophie, too.”

“Sophie?” said Jürgen with surprise.

“Yes, Sophie d’Auverne. We overlapped at the University of Paris…and were interns together at the Banque de France…she had the political gift even then,” said Jens, who had spent several years of his graduate studies in France. “Back before you and I met at the IMF.”

“Yes, I’ll try and get in touch with her,” said Jürgen.

“You do that,” said Jens with a knowing smile.

Outside in the hallway Jürgen walked down to a small lounge area overlooking the river. He texted Sophie: “Jens says you’re right—will be very tough.” She’ll decode the message, he thought.