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| Eurozone crisis live: Greek bailout deal threatened by €300m pension cuts row | Eurozone crisis live: Greek bailout deal threatened by €300m pension cuts row |
| (40 minutes later) | |
| 10.34am: Union leader have called a two-day strike starting tomorrow, as anger in Greece over the deal agreed last night bubbles away. | |
| The two major Greek unions, GSEE and ADEDY – who represent around half of all Greek workers – announced the walkout as part of a "social uprising" against the austerity measures that were agreed by Lucas Papademos, George Papandreou, Antonis Samaras and George Karatzaferis. | |
| The industrial action will come just three days after a general strike across Greece. The unions plan to hold protest rallies outside parliament on Friday and Saturday, and will return on Sunday when MP are likely to vote on the plan. | |
| 10.22am: Greek youth unemployment rate has now reached 48%, according to this morning's data (see also 10.05am). That's up from 22.4% back in 2008 when the financial crisis began. | |
| 10.05am: Grim economic news from Greece this morning -- the unemployment rate hit 20.9% in November, a new record high. Industrial output tumbled by 11.3% in December, compared with a year ago.. | |
| Another sign of Greece's continuing economic contraction. Duncan Weldon, economist and TUC senior policy advisor, pointed out that the data shows the country will struggle to grow its way out of the crisis: | |
| Meanwhile - Greek industrial production down over 11% year on year. Not much hope of an improving trade balance at this rate. | |
| — Duncan Weldon (@DuncanWeldon) February 9, 2012 | |
| 9.45am: Katie Allen, my colleague on the economics desk, explains what today's UK trade and industrial/manufacturing data (see 9.35am) means: | |
| The numbers for both industrial production and trade are ahead of forecasts and should help allay fears that Britain is headed into recession - technically two consecutive quarters of contraction. The official data from the fourth quarter of 2011 indicated the economy shrunk 0.2%. | |
| Not only did manufacturing output rise 1% in December, November's contraction was revised up to -0.1% from -0.2% previously reported by the ONS. | |
| Still, two notes of caution: | Still, two notes of caution: |
| Manufacturing makes up only 10.2% of the economy. The wider industrial sector, which also covers mining and utilities, makes up 15.4% of the economy. Secondly, the improvement in the trade balance was largely driven by a drop in imports - not exactly proof of burgeoning domestic demand. The pick-up in exports was very slight, a blow to government hopes for overseas trade to drive recovery and a longer-term rebalancing away from dependence on domestic demand. | Manufacturing makes up only 10.2% of the economy. The wider industrial sector, which also covers mining and utilities, makes up 15.4% of the economy. Secondly, the improvement in the trade balance was largely driven by a drop in imports - not exactly proof of burgeoning domestic demand. The pick-up in exports was very slight, a blow to government hopes for overseas trade to drive recovery and a longer-term rebalancing away from dependence on domestic demand. |
| 9.35am: Britain's manufacturing output has jumped, beating City forecasts. | 9.35am: Britain's manufacturing output has jumped, beating City forecasts. |
| Data just released showed that manufacturing output rose by 1% in December, with output across all industry (including energy utilities) growing by 0.5%. | Data just released showed that manufacturing output rose by 1% in December, with output across all industry (including energy utilities) growing by 0.5%. |
| That could ease fears that Britain will suffer a double-dip recession. However the Office for National Statistics also reported that industrial production fell by 1.4% during the final three months of 2011 (it declined in October and November) - slightly more than predicted by the ONS when it estimated that UK GDP fell by 0.2%. | |
| As economics editor Larry Elliott points out: | |
| The bounce back in manufacturing output had been predicted because the survey evidence for December had been strong. | The bounce back in manufacturing output had been predicted because the survey evidence for December had been strong. |
| Seperately, the UK total trade gap in goods and services has dropped to its lowest in almost a decade -- £1.1bn in December 2011. Mainly due, though, to falling domestic demand rather then resurgent exports. | |
| The trade gap in goods declined in December to £7.111bn, the smallest level since February 2010. That was mainly due to a decline in imports – down from £34.25bn in November to £32.67bn in December. Exports inched a little higher – from £25.34bn to £25.56bn. | |
| The UK also ran a services trade surplus of slightly above £6bn in December. | |
| 9.12am: Quite a packed agenda today, with plenty of British economic data this morning, and the interest rate/QE decisions at lunchtime. | 9.12am: Quite a packed agenda today, with plenty of British economic data this morning, and the interest rate/QE decisions at lunchtime. |
| The Super Mario Brothers will be busy - while ECB head Mario Draghi fields questions in Frankfurt, Italian PM Mario Monti will be visiting the US. | The Super Mario Brothers will be busy - while ECB head Mario Draghi fields questions in Frankfurt, Italian PM Mario Monti will be visiting the US. |
| • UK industrial+manufacturing production stats for December - 9.30am GMT • UK trade balance - 9.30am GMT • Bank of England interest rate/QE decision - noon GMT • European Central Bank interest rate decision - 12.45pm GMT / 1.45pmCET • ECB press conference with Mario Draghi - 1.30pm GMT / 2.30pm CET • US weekly initial jobless claims data - 1.30pm GMT / 8.30am EST • Eurogroup meeting in Brussels - 5pm GMT / 6pm CET • Mario Monti speaks at the Peterson Institute - 5.30pm GMT / 12.30pm EST | • UK industrial+manufacturing production stats for December - 9.30am GMT • UK trade balance - 9.30am GMT • Bank of England interest rate/QE decision - noon GMT • European Central Bank interest rate decision - 12.45pm GMT / 1.45pmCET • ECB press conference with Mario Draghi - 1.30pm GMT / 2.30pm CET • US weekly initial jobless claims data - 1.30pm GMT / 8.30am EST • Eurogroup meeting in Brussels - 5pm GMT / 6pm CET • Mario Monti speaks at the Peterson Institute - 5.30pm GMT / 12.30pm EST |
| There don't appear to be any bond auctions today. | There don't appear to be any bond auctions today. |
| 8.48am: The euro is rising today, and European stock markets have also opened higher. | 8.48am: The euro is rising today, and European stock markets have also opened higher. |
| The euro hit $1.3312 against the US dollar, on optimism that the final details of the agreement will be ironed out. In London, the FTSE 100 is up 21 points at 5897, close to its highest point of 2012. | The euro hit $1.3312 against the US dollar, on optimism that the final details of the agreement will be ironed out. In London, the FTSE 100 is up 21 points at 5897, close to its highest point of 2012. |
| As City veteran David Buik points out, stock markets have rallied strongly over the past few months despite the uncertainty in Greece. | As City veteran David Buik points out, stock markets have rallied strongly over the past few months despite the uncertainty in Greece. |
| Since Oct 2011 S&P 500 +22%, DOW +20.9%, FTSE +20%,.Since Sept 2011 DAX UP 34%!! GREEK EQUITIES +48.3%!! Bull market?Hard to believe! | Since Oct 2011 S&P 500 +22%, DOW +20.9%, FTSE +20%,.Since Sept 2011 DAX UP 34%!! GREEK EQUITIES +48.3%!! Bull market?Hard to believe! |
| — David Barlow Buik (@DavidBuik) February 9, 2012 | — David Barlow Buik (@DavidBuik) February 9, 2012 |
| 8.24am: George Karatzaferis, the junior partner in the coalition, initially declared that he opposed the agreement, only to later clarify that he would continue to support the coalition government | 8.24am: George Karatzaferis, the junior partner in the coalition, initially declared that he opposed the agreement, only to later clarify that he would continue to support the coalition government |
| Greek news website ekathimerini.com reports: | Greek news website ekathimerini.com reports: |
| Leaving the Maximos Mansion, Karatzaferis quoted a poem by Constantine P. Cavafy, suggesting that he had rejected the deal. | Leaving the Maximos Mansion, Karatzaferis quoted a poem by Constantine P. Cavafy, suggesting that he had rejected the deal. |
| On returning to his party's headquarters, he clarified that he objected to signing the agreement because he did not have enough time to study it. | On returning to his party's headquarters, he clarified that he objected to signing the agreement because he did not have enough time to study it. |
| Despite having it translated into Greek especially? | Despite having it translated into Greek especially? |
| Karatzaferis's comments have caused some bemusement in Greece, with Athenian Diane Shugart pointing out that you either back the deal, or you don't. | Karatzaferis's comments have caused some bemusement in Greece, with Athenian Diane Shugart pointing out that you either back the deal, or you don't. |
| ps someone should tell mr karatzaferis that agreeing albeit with serious reservations is like being a little pregnant #greece | ps someone should tell mr karatzaferis that agreeing albeit with serious reservations is like being a little pregnant #greece |
| — Diane Shugart (@dianalizia) February 9, 2012 | — Diane Shugart (@dianalizia) February 9, 2012 |
| Sony Kapoor, managing director of the Re-Define think tank, also isn't impressed with the comments coming out of Athens: | Sony Kapoor, managing director of the Re-Define think tank, also isn't impressed with the comments coming out of Athens: |
| Methinks there is a lot of posturing re #Greek deal, primarily for domestic audiences in #Greece & #Germany | Methinks there is a lot of posturing re #Greek deal, primarily for domestic audiences in #Greece & #Germany |
| — Sony Kapoor (@SonyKapoor) February 9, 2012 | — Sony Kapoor (@SonyKapoor) February 9, 2012 |
| 8.18am: Greek finance minister Evangelos Venizelos struck an optimistic tone as he headed to Brussels to present the results of last night's talks to the Eurogroup (made up of the 17 finance ministers from countries within the euro). | 8.18am: Greek finance minister Evangelos Venizelos struck an optimistic tone as he headed to Brussels to present the results of last night's talks to the Eurogroup (made up of the 17 finance ministers from countries within the euro). |
| Venizelos said: | Venizelos said: |
I leave for Brussels with hope that the Eurogroup will take a positive decision concerning the new aid plan. | I leave for Brussels with hope that the Eurogroup will take a positive decision concerning the new aid plan. |
| As the prime minister said, there is agreement on all the issues bar one. | As the prime minister said, there is agreement on all the issues bar one. |
| Christine Lagarde of the International Monetary Fund will also attend this afternoon's meeting in Brussels. | Christine Lagarde of the International Monetary Fund will also attend this afternoon's meeting in Brussels. |
| Gary Jenkins, City analyst at Evolution Securities, suggests that Greece may be hoping that the EU decides to let them off the last €300m. Possibly, but on the other hand Athens's 'goodwill bucket' is running pretty dry. | Gary Jenkins, City analyst at Evolution Securities, suggests that Greece may be hoping that the EU decides to let them off the last €300m. Possibly, but on the other hand Athens's 'goodwill bucket' is running pretty dry. |
| Jenkins also questioned whether the agreement could actually be implemented: | Jenkins also questioned whether the agreement could actually be implemented: |
| Whether an agreement will survive the April election, let alone the years of economic hardship to come, is a moot point. Apparently the terms of the agreement are based upon (amongst many other things) Greece returning to economic growth in the first half of 2013, which may be a tad optimistic. | Whether an agreement will survive the April election, let alone the years of economic hardship to come, is a moot point. Apparently the terms of the agreement are based upon (amongst many other things) Greece returning to economic growth in the first half of 2013, which may be a tad optimistic. |
| 7.57am: Prime minister Lucas Papademos held talks with Greece's Troika of lenders (the IMF, the ECB and the EU) overnight after the talks with Papandreou, Samaras and Karatzaferis broke up. | 7.57am: Prime minister Lucas Papademos held talks with Greece's Troika of lenders (the IMF, the ECB and the EU) overnight after the talks with Papandreou, Samaras and Karatzaferis broke up. |
| Reuters is reporting that Greece has been given another two weeks to find €300m in alternative savings, if the pensions issue really cannot be resolved. According to an unnamed official: | Reuters is reporting that Greece has been given another two weeks to find €300m in alternative savings, if the pensions issue really cannot be resolved. According to an unnamed official: |
| Greece has another 15 days to specify fiscal savings worth 300 million euros. | Greece has another 15 days to specify fiscal savings worth 300 million euros. |
| 7.44am: On a positive note, plenty of progress was made at last night's talks, which lasted over seven hours. | 7.44am: On a positive note, plenty of progress was made at last night's talks, which lasted over seven hours. |
| George Papandreou (head of PASOK - socialist), Antonis Samaras (New Democracy - right wing) and George Karatzaferis (Laos - far right) agreed to around €3bn of austerity measures. That includes hefty cuts to the minimum wage, and up to 15,000 job cuts across the civil service. | George Papandreou (head of PASOK - socialist), Antonis Samaras (New Democracy - right wing) and George Karatzaferis (Laos - far right) agreed to around €3bn of austerity measures. That includes hefty cuts to the minimum wage, and up to 15,000 job cuts across the civil service. |
| Pensions, though, remained the sticking point, leaving technocratic PM Lucas Papademos around €300m shy of his target of €3.3bn of savings for 2012. | Pensions, though, remained the sticking point, leaving technocratic PM Lucas Papademos around €300m shy of his target of €3.3bn of savings for 2012. |
| With elections looming, it appears that no-one wanted to be seen as reponsible for cutting money to the elderly. It appears that New Democracy would not accept cuts to supplementary state pensions, while Pasok would not accept cuts to the primary pension. | With elections looming, it appears that no-one wanted to be seen as reponsible for cutting money to the elderly. It appears that New Democracy would not accept cuts to supplementary state pensions, while Pasok would not accept cuts to the primary pension. |
| Samaras declared last night that he did not have the right "not to negotiate hard" for Greek pensioners: | Samaras declared last night that he did not have the right "not to negotiate hard" for Greek pensioners: |
| During these difficult times, we must look at ordinary people, at the pensioner. | During these difficult times, we must look at ordinary people, at the pensioner. |
| Panos Beglitis, a spokesman for the Pasok socialist party, told journalists in Athens that his party were also opposed to cuts in main pensions. He added that the three leaders had accepted that the minimum wage would drop by 22%. | Panos Beglitis, a spokesman for the Pasok socialist party, told journalists in Athens that his party were also opposed to cuts in main pensions. He added that the three leaders had accepted that the minimum wage would drop by 22%. |
| 7.30am: Good morning, and welcome to our rolling coverage of the eurozone crisis. | 7.30am: Good morning, and welcome to our rolling coverage of the eurozone crisis. |
| Overnight, Greece's leaders have failed to agree to the full terms of its £130bn bailout package. Despite negotiating until nearly dawn, the coalition government headed by Lucas Papademos could not agree the details of cuts to pensions. | Overnight, Greece's leaders have failed to agree to the full terms of its £130bn bailout package. Despite negotiating until nearly dawn, the coalition government headed by Lucas Papademos could not agree the details of cuts to pensions. |
| This leaves Greece short of around €300m of savings needed to persuade its international lenders to approve its second rescue deal. | This leaves Greece short of around €300m of savings needed to persuade its international lenders to approve its second rescue deal. |
| Despite the hitch, the full Greek cabinet is due to meet later today to decide whether to rubber-stamp the new austerity programme. Evangelos Venizelos, the Greek finance minister, is heading to Brussels to present it to finance ministers from across the eurozone | Despite the hitch, the full Greek cabinet is due to meet later today to decide whether to rubber-stamp the new austerity programme. Evangelos Venizelos, the Greek finance minister, is heading to Brussels to present it to finance ministers from across the eurozone |
| But with €300m still to find, will Venizelos get a warm welcome from the eurogroup? | But with €300m still to find, will Venizelos get a warm welcome from the eurogroup? |
| It's going to be a busy day. Both the Bank of England and the European Central Bank will announce their latest monetary policy decisions this lunchtime -- Britain could get more quantitative easing, while ECB chair Mario Draghi will be quizzed on the euro crisis. | It's going to be a busy day. Both the Bank of England and the European Central Bank will announce their latest monetary policy decisions this lunchtime -- Britain could get more quantitative easing, while ECB chair Mario Draghi will be quizzed on the euro crisis. |