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Greek crisis: eurozone ministers seek deal on bailout and debt relief - business live Greek crisis: eurozone ministers seek deal on bailout and debt relief - business live
(35 minutes later)
8.35am BST
08:35
Markets dip ahead of eurogroup meeting
European stock markets have opened in the red, as investors watch to see how today’s eurogroup meeting proceeds.
Germany’s DAX led the declines, down 0.5% .
The City is watching to see whether Greece receives funds to help it cover this summer’s debt repayments, and for clashes between the eurozone and the International Monetary Fund.
Conner Campbell of SpreadEx explains:
Whilst it seems almost guaranteed that Greece will receive this monetary boost, things aren’t so cut and dry. The IMF is reportedly refusing to participate in this latest bailout without Greece being granted ‘upfront and unconditional’ debt relief. The issue continues to be the one major division over the treatment of Greece, and could cause a few heated debates among the Eurozone’s finance ministers as they try and bridge the schism between those fiercely opposed to the idea and those willing to cut the country some debt-slack.
8.32am BST
08:32
A surge in investment helped Germany’s economy to grow at the fastest pace in two years.
The Federal Statistics Office in Wiesbaden has reported that capital investment jumped by 1.8% in January-March, with building activity surging by 2.3%. Consumers, though, were more restrained, as private consumption rose by 0.4%.
And that meant Germany’s GDP jumped by a punchy 0.7% in the last quarter, confirming the initial estimate two weeks ago.
Economists, though, reckon growth is now slowing....
German Final GDP, Q1 "Boosted by strong investment, but unlikely to last" @ClausVistesen #PantheonMacro
8.16am BST
08:16
Today’s eurogroup meeting begins at 3pm Brussels time, or 2pm in the UK.
And the AFP newswire explains why it matters:
Greece urgently needs the next tranche of bailout money to repay big loans to the European Central Bank (ECB) and IMF in July, and has already fallen behind in paying for everyday government duties and public sector wages.
The outcome of the meeting remains highly uncertain, due to a row between Greece’s creditors, the eurozone governments and the International Monetary Fund, over the state of the Greek economy and debt relief.
8.12am BST
08:12
Royal Bank of Canada’s economics team are quite confident that Greece’s creditors will agree to hand over €11bn of bailout loans today.
They told clients:
Today’s meeting of euro area finance ministers will be focused on Greece. On Sunday, the Greek parliament passed a package of tax increases and reforms along with the contentious contingency to be deployed in the event of the 2018 budget going off track. Assuming it finds the measures acceptable, Eurogroup is expected to disperse the next tranche of programme funds (c.€11bn) which would allow Greece to meet forthcoming debt repayments and clear arrears which have built up as the review has dragged on.
The focus then moves on to debt relief with the ministers set to discuss options for debt relief that have been drawn up by officials as the euro area looks to bridge the gap between it and the IMF on the sustainability of Greece’s debt and allow the IMF participate in the latest Greek programme.
7.47am BST7.47am BST
07:4707:47
The agenda: Eurogroup meeting on Greece; Carney at parliamentThe agenda: Eurogroup meeting on Greece; Carney at parliament
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
It’s nine months since Greece signed up to its third bailout, after months of torturous negotiations and deadlock climaxed in an all-night summit meeting.It’s nine months since Greece signed up to its third bailout, after months of torturous negotiations and deadlock climaxed in an all-night summit meeting.
And today, Athens could finally pass the first review of that programme, unlocking €11bn in loans to help ward off another financial crisis.And today, Athens could finally pass the first review of that programme, unlocking €11bn in loans to help ward off another financial crisis.
Eurozone finance ministers will gather in Brussels this lunchtime for a Eurogroup meeting. They are likely to agree that the austerity package of tax rises and reforms passed by Greek MPs on Sunday go far enough.Eurozone finance ministers will gather in Brussels this lunchtime for a Eurogroup meeting. They are likely to agree that the austerity package of tax rises and reforms passed by Greek MPs on Sunday go far enough.
But the relief could be short-lived. Although Greece will get a pat on the head for doing its best, there are still serious tensions between its creditors.But the relief could be short-lived. Although Greece will get a pat on the head for doing its best, there are still serious tensions between its creditors.
Last night, the International Monetary Fund made a significant intervention, warning that the Eurozone’s plans to give Greece some debt relief simply don’t go far enough.Last night, the International Monetary Fund made a significant intervention, warning that the Eurozone’s plans to give Greece some debt relief simply don’t go far enough.
It also insisted that Greece’s fiscal targets are simply unachievable.It also insisted that Greece’s fiscal targets are simply unachievable.
The Fund is pushing European creditors to forgo any Greek debt payments until 2040 and to also peg the borrowing costs at 1.5%. That would be politically awkward for some eurozone members, such as Germany, as it could expose them to further Greek bills.The Fund is pushing European creditors to forgo any Greek debt payments until 2040 and to also peg the borrowing costs at 1.5%. That would be politically awkward for some eurozone members, such as Germany, as it could expose them to further Greek bills.
The Fund also wants Greece’s debt relief wrapped up in two years, undermining the eurozone’s goal of delaying some debt relief until after the current bailout expires in 2018 (after the next German federal elections).The Fund also wants Greece’s debt relief wrapped up in two years, undermining the eurozone’s goal of delaying some debt relief until after the current bailout expires in 2018 (after the next German federal elections).
In a clear challenge to the eurozone, the IMF declares:In a clear challenge to the eurozone, the IMF declares:
“The implementation of debt relief should be completed by the end of the programme period.“The implementation of debt relief should be completed by the end of the programme period.
“Providing an upfront, unconditional component to debt relief is critical to provide a strong and credible signal to markets about the commitment of official creditors to ensuring debt sustainability, which in itself could contribute to lowering market financing costs. An upfront component can also help garner more ownership for reforms.”“Providing an upfront, unconditional component to debt relief is critical to provide a strong and credible signal to markets about the commitment of official creditors to ensuring debt sustainability, which in itself could contribute to lowering market financing costs. An upfront component can also help garner more ownership for reforms.”
Related: IMF tells EU it must give Greece unconditional debt reliefRelated: IMF tells EU it must give Greece unconditional debt relief
So it could be a difficult meeting....So it could be a difficult meeting....
Also coming up today...Also coming up today...
Bank of England governor Mark Carney will be in the spotlight this morning, when he testifies to parliament about the latest Quarterly Inflation Report.Bank of England governor Mark Carney will be in the spotlight this morning, when he testifies to parliament about the latest Quarterly Inflation Report.
He’ll surely face criticism from pro-Brexit MPs, over his prediction that Britain could fall into recession if it leaves the EU.He’ll surely face criticism from pro-Brexit MPs, over his prediction that Britain could fall into recession if it leaves the EU.
TheThe
punch-uppunch-up
hearing starts at 10am, and City experts are predicting a lively one.... hearing starts at 10am, and City experts are predicting a lively one....
Best way to make money today may be selling tickets to the inevitable ding-dong between Governor Carney and Conservative MP Jacob Rees-Mogg.Best way to make money today may be selling tickets to the inevitable ding-dong between Governor Carney and Conservative MP Jacob Rees-Mogg.
Before that, the latest UK public finance figures are released, at 9.30am, showing how much Britain had to borrow in April.Before that, the latest UK public finance figures are released, at 9.30am, showing how much Britain had to borrow in April.
DIY chain Kingfisher and building society Nationwide are both reporting result this morning. DIY chain Kingfisher and building society Nationwide are both reporting result this morning. Oil giant Shell is holding its AGM.
And we’re also getting two pieces of German data. The second estimate of GDP in the last quarter is just being released, confirming that the economy grew by 0.7%. The ZEW institute is publishing its estimate of investor confidence at 10am.And we’re also getting two pieces of German data. The second estimate of GDP in the last quarter is just being released, confirming that the economy grew by 0.7%. The ZEW institute is publishing its estimate of investor confidence at 10am.
UpdatedUpdated
at 8.04am BST at 8.20am BST