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| Eurozone crisis live: Greece faces deadline over second bailout | Eurozone crisis live: Greece faces deadline over second bailout |
| (40 minutes later) | |
| The FT has a story this morning suggesting as many as half of the capital-boosting proposals put forward by 30 European banks may be rejected as not sufficiently credible. Remember these banks were forced to come up with plans to increase their capital cushions after the European Banking Authority in December found that together they needed to raise €115bn to meet their regulatory targets. | |
| The EBA board are due to discussed submitted plans at a meeting next week. Some experts have a pointed finger at Commerzbank as one bank likely to find filling its capital shortfall a big ask. Since then the German bank has generated €3bn of capital toward its €5.3bn stress test shortfall and local regulators have played down concerns. | |
| Spanish bank Santander was found to have the largest shortfall - of €15bn - but has insisted it has found ways of filling the gap. Only Italy's Unicredit opted for a rights issue to raise capital - and look how well that went. | |
| 8.16am: There's not much in the diary today. Here's the agenda: | |
| 10am deadline for Greek politicians to reach agreement on austerity measures 11am German factory orders for December (Consensus forecast: 1% rise) 2pm Klaas Knot, governing council member of the ECB speaking at an event in Amsterdam | |
| 8.05am: As time ticks on there is increasing concern that a lack of agreement among Greek politicians will overshadow the day. The Asian markets were up overnight on the back of Friday's strong jobs figures from the US. (Japan's Nikkei average rose 1.1% to a three-month high of 8,925 points, the Hang Seng was up 0.51% at 20,862.) Back in Europen the mood is more somber. | |
| Greek coalition parties are supposed to be working to a deadline of midday - 10am GMT. That might get pushed back, of course, but if it passes without agreement it will do nothing to calm the mood. | |
| Here is the view from analysts at Investec: | |
| Greek politicians face a general election soon after the second bailout has been agreed (or not as it may be). The prospect of an election campaign is certain to influence bailout negotiations. The extra austerity measures may well be counterproductive, but a messy default and uncertainty over Greece's position in the Euro will not do much good either, so it is a bit of a lose-lose situation for Greek politicians. Public opinion seems to put greater trust in outsiders than in domestic politicians though, so putting up with EU/IMF conditions may still have the upper hand with the electorate, but remains to be seen if politicians can agree. With no agreement later today, expect markets to become increasingly concerned and a lack of flexibility from the EU may cause some contagion… | |
| 7.45am: Good morning, and welcome to our rolling coverage of the eurozone financial crisis. | 7.45am: Good morning, and welcome to our rolling coverage of the eurozone financial crisis. |
| Today is deadline day for Greece, which must tell the European Union whether it accepts the terms of its second bailout, worth €130bn. The heads of its three largest political parties spent the weekend locked in talks, but are still divided. | Today is deadline day for Greece, which must tell the European Union whether it accepts the terms of its second bailout, worth €130bn. The heads of its three largest political parties spent the weekend locked in talks, but are still divided. |
| One leader – Laos's Giorgos Karatzaferis - has already refused to endorse the painful package of spending cuts and tax rises. Can PM Lucas Papademos pull a deal out of the fire? | One leader – Laos's Giorgos Karatzaferis - has already refused to endorse the painful package of spending cuts and tax rises. Can PM Lucas Papademos pull a deal out of the fire? |
| Athens is also still struggling to reach a deal with its private creditors over its debt restructuring package – adding to fears that Greece might fall into bankruptcy. | Athens is also still struggling to reach a deal with its private creditors over its debt restructuring package – adding to fears that Greece might fall into bankruptcy. |
| On the economic front, the latest German factory order data should be released this morning, showing how its manufacturers fared at the end of 2011. | On the economic front, the latest German factory order data should be released this morning, showing how its manufacturers fared at the end of 2011. |