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Eurozone crisis live: Greece bailout decision due today Eurozone crisis live: Greece bailout decision due today
(40 minutes later)
11.53am: Evangelos Venizelos's claim that Greece's long period of uncertainty will end today (see 10.02am) may be optimistic, as there are several issues outstanding:
1) Is the package big enough? The Greek economy has deteriorated since it was agreed last autumn, meaning a €6bn gap has opened up. Greece now needs at least €136bn, and today's meeting must bridge the gap.
The FT suggests this morning that the money could come from the European Central Bank, from the "profits" it has made on Greek debt. That only works, though, if the ECB gets the full face value of bonds it bought at distressed levels on the bond markets.
[there's a good explainer on the ECB bond swap here, by Open Europe]
2) Will Greece's private creditors agree to take part in the debt restructuring? The Private Sector Involvement (PSI) is scheduled to begin on Wednesday. There are fears that the voluntary process may not attract enough support, prompting rumours that Greece could retrofit 'collective action clauses' allowing them to force creditors into accepting losses.
3) Will eurozone governments agree? Once the Eurogroup declares that Greece has met the terms of the restructuring deal, it must be passed by national parliaments. The Bundestag is due to vote on 27 February.
4) How much support will the International Monetary Fund provide? There are reports that the IMF will only take a smaller share of the burden this time round – perhaps 10%, compared with 30% for Greece's first package.
And overshadowing everything, the question of how Greece's economy will perform this year, and beyond.
As Gary Jenkins of Swordfish Research commented:
The story does not end with the extension of the second bailout package as there is likely to be much closer monitoring of the Greek fiscal situation and who knows how the upcoming elections could change the landscape. This one will run and run….
11.26am: Developments in Brussels, where EU spokesman Amadeu Altafaj is briefing the media about this afternoon's talks.
Altafaj said we have reached the "last mile" in covering the gap in Greece's 2012 budget, and that the Athens government must explain how this shortfall has been covered.
(Over the weekend, Lucas Papademos's cabinet agreed yet more austerity measures that, it says, makes up the €325m that was outstanding).
Interestingly, Altafaj also said that the eurogroup of finance ministers meeting in Brussels are preparing for Euro leaders to take a final decision on Greece's rescue package on March 1.
Altafaj also attempted to quash fears that Portugal could follow Greece. He said that the performance of Lisbon government's fiscal consolidation has been "satisfactory", and that economic reforms are working. Portugal has hit the targets set by the Troika [IMF, ECB, EU], but its economy is suffering – with the unemployment rate hitting 14% last week.
11.05am: The Bundesbank has predicted that the German economy will make a rapid return to growth this year, despite the eurozone debt crisis.11.05am: The Bundesbank has predicted that the German economy will make a rapid return to growth this year, despite the eurozone debt crisis.
Germany's central bank said that the recent economic weakness (Germany shrank by 0.2% in the last quarter of 2011) was a short-lived issue. In its monthly report for February, it said:Germany's central bank said that the recent economic weakness (Germany shrank by 0.2% in the last quarter of 2011) was a short-lived issue. In its monthly report for February, it said:
The outlook for the German economy improved perceptibly towards the end of the reporting period, though risks relating to the sovereign debt crisis remainThe outlook for the German economy improved perceptibly towards the end of the reporting period, though risks relating to the sovereign debt crisis remain
The assumption underlying the Bundesbank's economic forecast in December of a fairly rapid resumption of growth looks more likely to materialise at the present juncture.The assumption underlying the Bundesbank's economic forecast in December of a fairly rapid resumption of growth looks more likely to materialise at the present juncture.
10.31am: Here's some City comment on the Eurogroup meeting today.10.31am: Here's some City comment on the Eurogroup meeting today.
Lee McDarby, Investec Corporate Treasury:Lee McDarby, Investec Corporate Treasury:
The biggest fear of the market is nothing to do with the ability of the Greek government to honour the agreement or the size of the haircut private investors will be forced to take on their debt (even though both these issues will be discussed this afternoon), but whether an agreement will actually be passed.
The uncertainty of the outcome of any decisions taken today cannot be underestimated with the most extreme being measures taken to set the wheels in motion for an orderly default by Greece and consequently an orderly exit from the euro and return to the Drachma.		The biggest fear of the market is nothing to do with the ability of the Greek government to honour the agreement or the size of the haircut private investors will be forced to take on their debt (even though both these issues will be discussed this afternoon), but whether an agreement will actually be passed.
The uncertainty of the outcome of any decisions taken today cannot be underestimated with the most extreme being measures taken to set the wheels in motion for an orderly default by Greece and consequently an orderly exit from the euro and return to the Drachma.
Jane Foley, RabobankJane Foley, Rabobank
There is plenty of optimism that Eurozone finance ministers will finally be able to rubber stamp Greece's second bail-out package at this afternoon's meeting in Brussels. There is less hope, however, that Greece will put in place all the austerity measures that have been asked of them suggesting that while there is a strong chance that Greece will avoid a messy default next month the problems that are facing the country will continue to play out potentially for years.
The key question for the EMU is thus to what extent have banks and other investors managed to protect themselves from further negative developments in Greece. Contagion risk is not as high as it what at the start of the Greek crisis but it is still a significant threat for EMU with Portugal, Ireland, Italy and Spain all still potentially vulnerable.		There is plenty of optimism that Eurozone finance ministers will finally be able to rubber stamp Greece's second bail-out package at this afternoon's meeting in Brussels. There is less hope, however, that Greece will put in place all the austerity measures that have been asked of them suggesting that while there is a strong chance that Greece will avoid a messy default next month the problems that are facing the country will continue to play out potentially for years.
The key question for the EMU is thus to what extent have banks and other investors managed to protect themselves from further negative developments in Greece. Contagion risk is not as high as it what at the start of the Greek crisis but it is still a significant threat for EMU with Portugal, Ireland, Italy and Spain all still potentially vulnerable.
Elisabeth Afseth of Investec:Elisabeth Afseth of Investec:
Opinion polls in Greece show low support for the two main parties, who are the only ones to have signed an agreement to stick with the terms of the bailout programme after the election. Given the uncertain political outlook, European leaders may feel uncomfortable with agreeing a second bailout, especially as large payments are needed upfront to facilitate the private sector debt exchange. Patience with Greece is running thin and euro area finance ministers will look to impose control measures to try to ensure closer adherence to the fiscal and economic reform programme. But these concerns will probably be outweighed by fear of the consequences of no agreement today. Pushing Greece to a disorderly default and likely exit from the euro would set a dangerous precedent. Without clear ring-fencing of the remaining countries (and we doubt euro leaders have been quietly working out a bullet proof plan to contain contagion should Greece leave) it would be very risky to delay this issue any further, though we are getting used to broken deadlines.Opinion polls in Greece show low support for the two main parties, who are the only ones to have signed an agreement to stick with the terms of the bailout programme after the election. Given the uncertain political outlook, European leaders may feel uncomfortable with agreeing a second bailout, especially as large payments are needed upfront to facilitate the private sector debt exchange. Patience with Greece is running thin and euro area finance ministers will look to impose control measures to try to ensure closer adherence to the fiscal and economic reform programme. But these concerns will probably be outweighed by fear of the consequences of no agreement today. Pushing Greece to a disorderly default and likely exit from the euro would set a dangerous precedent. Without clear ring-fencing of the remaining countries (and we doubt euro leaders have been quietly working out a bullet proof plan to contain contagion should Greece leave) it would be very risky to delay this issue any further, though we are getting used to broken deadlines.
10.02am: Just in – the Greek finance minister, Evangelos Venizelos, has declared that Greece has met all the conditions set by its lenders, and its people have made the necessary sacrifices.10.02am: Just in – the Greek finance minister, Evangelos Venizelos, has declared that Greece has met all the conditions set by its lenders, and its people have made the necessary sacrifices.
In a statement issued ahead of this afternoon's meeting (viewable in Greek here) , Venizelos said:In a statement issued ahead of this afternoon's meeting (viewable in Greek here) , Venizelos said:
We expect today to close a long period of uncertainty that has not been to the benefit of either the Greek economy or the euro area.We expect today to close a long period of uncertainty that has not been to the benefit of either the Greek economy or the euro area.
Venizelos, who has railed against those calling for Greece to default, said Europe must send a "clear message" today that the decision will be taken on the basis of rules that are "stable" and do not keep changing.Venizelos, who has railed against those calling for Greece to default, said Europe must send a "clear message" today that the decision will be taken on the basis of rules that are "stable" and do not keep changing.
He added, though, that negotiations will continue until the last minute.He added, though, that negotiations will continue until the last minute.
9.58am: The smell of teargas hung over the streets of central Athens last night as protesters gathered for an anti-austerity rally outside the Greek parliament.9.58am: The smell of teargas hung over the streets of central Athens last night as protesters gathered for an anti-austerity rally outside the Greek parliament.
This photo shows one demonstrator being detained by riot police.This photo shows one demonstrator being detained by riot police.
9.43am: In Greece, the talk is that this could be a historic day in the country's history, despite the political infighting and public anger over the terms of its financial rescue package.9.43am: In Greece, the talk is that this could be a historic day in the country's history, despite the political infighting and public anger over the terms of its financial rescue package.
News anchor Nikos Evangelatos confidently told the nation that:News anchor Nikos Evangelatos confidently told the nation that:
By this time tomorrow our debt should have been reduced by €100bn and we will have €130bn in aid, which ultimately is more debt but debt that we will pay back on more favourable terms.By this time tomorrow our debt should have been reduced by €100bn and we will have €130bn in aid, which ultimately is more debt but debt that we will pay back on more favourable terms.
Helena Smith in Athens has more:Helena Smith in Athens has more:

The next 10 days will be "the days that changed Greece", pundits say, as the country races to enact reforms it has delayed implementing over the past two years in time for the first tranche of aid in March when Athens must redeem €14.5bn euro in debt.
The next 10 days will be "the days that changed Greece", pundits say, as the country races to enact reforms it has delayed implementing over the past two years in time for the first tranche of aid in March when Athens must redeem €14.5bn euro in debt.
Labour laws will change, public sector jobs for life will go, civil servants will be axed - in what will amount to a drastic overhaul of the inefficient modern Greek state.Labour laws will change, public sector jobs for life will go, civil servants will be axed - in what will amount to a drastic overhaul of the inefficient modern Greek state.
"It sounds barbaric, almost impossible but it has to be done," an economics analyst told a local radio station. "Everything about the way our country works is about to change because the troika [the EU, ECB and IMF] has made clear that without such reforms there can be no money and without the money bankruptcy lies ahead.""It sounds barbaric, almost impossible but it has to be done," an economics analyst told a local radio station. "Everything about the way our country works is about to change because the troika [the EU, ECB and IMF] has made clear that without such reforms there can be no money and without the money bankruptcy lies ahead."
9.21am: Greek flags were spotted on the streets of Madrid last weekend as part of the protests against Spain's austerity programme.9.21am: Greek flags were spotted on the streets of Madrid last weekend as part of the protests against Spain's austerity programme.
The "We're All Greek Now!" movement has called on people all over the world to show solidarity with Greece's population.

This photo, published by Twitter user @soniabouzas, shows two Greek flags on display in Madrid on Sunday.		The "We're All Greek Now!" movement has called on people all over the world to show solidarity with Greece's population.

This photo, published by Twitter user @soniabouzas, shows two Greek flags on display in Madrid on Sunday.
@northaura #19FTomaLaCalle Madrid ayer en Sol banderas con Grecia twitter.com/soniabouzas/st…@northaura #19FTomaLaCalle Madrid ayer en Sol banderas con Grecia twitter.com/soniabouzas/st…
— Sonia (@soniabouzas) February 20, 2012— Sonia (@soniabouzas) February 20, 2012
9.02am: News in from Athens, where Greek media is reporting that Lucas Papademos is "working feverishly" to avoid any let-up in the loan deal.9.02am: News in from Athens, where Greek media is reporting that Lucas Papademos is "working feverishly" to avoid any let-up in the loan deal.
Our correspondent Helena Smith explains:Our correspondent Helena Smith explains:

With so much hanging on the agreement – future aid but also the country's fate as a eurozone member – the technocrat prime minister will hold back-to-back meetings ahead of euro group finance ministers assembling at 3:30PM CET (2.30PM GMT) to make their crucial decision.
With so much hanging on the agreement – future aid but also the country's fate as a eurozone member – the technocrat prime minister will hold back-to-back meetings ahead of euro group finance ministers assembling at 3:30PM CET (2.30PM GMT) to make their crucial decision.
"He will be holding meetings all day so there is no short-circuit," said Flash news."He will be holding meetings all day so there is no short-circuit," said Flash news.
Among these will be a meeting with representatives of the Institute of International Finance (IIF) about the long-delayed debt restructuring also on the cards for Greece. Greek officials say the private sector bondswap, which will write off around €100bn from Greece's €350bn debt pile, still awaits "finishing touches".Among these will be a meeting with representatives of the Institute of International Finance (IIF) about the long-delayed debt restructuring also on the cards for Greece. Greek officials say the private sector bondswap, which will write off around €100bn from Greece's €350bn debt pile, still awaits "finishing touches".
Despite Papademos rushing through emergency legislation on pension and pay cuts ahead of the meeting – parliament is expected to vote on the bill this week – not everyone is convinced that Greece's febrile political atmosphere will allow for spending cuts and structural reforms to be enacted. The former vice president of the European Central Bank will have to muster all of his expertise, persuasion and charm to convince hardier eurozone nations that this is not the case.Despite Papademos rushing through emergency legislation on pension and pay cuts ahead of the meeting – parliament is expected to vote on the bill this week – not everyone is convinced that Greece's febrile political atmosphere will allow for spending cuts and structural reforms to be enacted. The former vice president of the European Central Bank will have to muster all of his expertise, persuasion and charm to convince hardier eurozone nations that this is not the case.
8.51am: The idea that Greece's second bailout should be paid into an 'escrow' account is gaining ground this morning.8.51am: The idea that Greece's second bailout should be paid into an 'escrow' account is gaining ground this morning.
An Escrow account would means that although Greece would have been granted its funds, its access would be restricted. Miss its targets and the funding stream could run dry.An Escrow account would means that although Greece would have been granted its funds, its access would be restricted. Miss its targets and the funding stream could run dry.
Austrian finance minister Maria Fekter has said that the eurogroup's working group has been looking at escrow options in recent days.Austrian finance minister Maria Fekter has said that the eurogroup's working group has been looking at escrow options in recent days.
That is being prepared on the technical level. The finance ministers will discuss this intensely at their meeting. I welcome such a special account.That is being prepared on the technical level. The finance ministers will discuss this intensely at their meeting. I welcome such a special account.
French finance minister Francois Baroin also said this morning that he supported the idea of paying Greece's funds into an escrow account.French finance minister Francois Baroin also said this morning that he supported the idea of paying Greece's funds into an escrow account.
8.42am: French finance minister Francois Baroin says he will urge his eurozone counterparts to approve Greece's bailout package today.8.42am: French finance minister Francois Baroin says he will urge his eurozone counterparts to approve Greece's bailout package today.
Baroin told Europe 1 Radio this morning that:Baroin told Europe 1 Radio this morning that:
All the elements are in place...both with the bankers, private sector creditors, and public sector creditors, the states and central banks....All the elements are in place...both with the bankers, private sector creditors, and public sector creditors, the states and central banks....
That is what I will plead for as minister of finance today. I think we should take account of everything that has been done in recent weeks by the Greek government, and by political parties both on the left and the right.That is what I will plead for as minister of finance today. I think we should take account of everything that has been done in recent weeks by the Greek government, and by political parties both on the left and the right.
Baroin (who famously described the UK's economic situation as "very worrying" last December) added that Greece could find itself in "bankruptcy" unless the deal is agreed in time for its €14.5bn debt repayment on 20 March.Baroin (who famously described the UK's economic situation as "very worrying" last December) added that Greece could find itself in "bankruptcy" unless the deal is agreed in time for its €14.5bn debt repayment on 20 March.
8.33am: European stock markets have opened strongly this morning, on optimism that Greece's bailout will be agreed.8.33am: European stock markets have opened strongly this morning, on optimism that Greece's bailout will be agreed.
The FTSE 100 is 34 points higher at 5938 – its highest level since last July.
The French CAC is also up 0.6%, with Germany's DAX a little higher.		The FTSE 100 is 34 points higher at 5938 – its highest level since last July.
The French CAC is also up 0.6%, with Germany's DAX a little higher.
Michael Hewson, senior market analyst at CMC Markets, said traders are hopeful that a deal will come today, having driven shares higher over the last couple of weeks.Michael Hewson, senior market analyst at CMC Markets, said traders are hopeful that a deal will come today, having driven shares higher over the last couple of weeks.
The markets certainly think that the odds are good, given the way they have front run a possible outcome over the last few days as the euro and equity markets have continued to rise.The markets certainly think that the odds are good, given the way they have front run a possible outcome over the last few days as the euro and equity markets have continued to rise.

Shares have been gaining ground for most of this year – the Footsie is 6.5% higher since 2012 began.
Shares have been gaining ground for most of this year – the Footsie is 6.5% higher since 2012 began.
8.23am: There's plenty of coverage of the Greek crisis in today's Guardian:8.23am: There's plenty of coverage of the Greek crisis in today's Guardian:
David Gow reports that Lucas Papademos's unexpected flight to Brussels came after Germany voiced new fears about Greece:David Gow reports that Lucas Papademos's unexpected flight to Brussels came after Germany voiced new fears about Greece:
Wolfgang Schäuble, the German finance minister and focus of mounting Greek fury at austerity measures imposed on Greece, accused Athens of rejecting offers of help in rebuilding its shattered economy and of dragging its feet on reforms.Wolfgang Schäuble, the German finance minister and focus of mounting Greek fury at austerity measures imposed on Greece, accused Athens of rejecting offers of help in rebuilding its shattered economy and of dragging its feet on reforms.
The German economic ministry, according to the paper Welt am Sonntag, has drawn up a "sobering" report on what it sees as Greece's failure to make implementing reforms its priority, and has called for greater co-operation with Brussels as a pre-condition for approving the bailout.The German economic ministry, according to the paper Welt am Sonntag, has drawn up a "sobering" report on what it sees as Greece's failure to make implementing reforms its priority, and has called for greater co-operation with Brussels as a pre-condition for approving the bailout.
Papademos is to be on hand to assure sceptics that his government can deliver on these planned reforms and iron out final technical details of the package.Papademos is to be on hand to assure sceptics that his government can deliver on these planned reforms and iron out final technical details of the package.
From Athens, Helena Smith explained that the Greece cabinet has agreed new spending cuts:From Athens, Helena Smith explained that the Greece cabinet has agreed new spending cuts:
The legislation is expected to include wage and pension cuts, and a supplement to the 2012 budget which already foresees €3.2bn in savings.The legislation is expected to include wage and pension cuts, and a supplement to the 2012 budget which already foresees €3.2bn in savings.
"It has been impossible not to cut pensions," said Papademos, a former vice president of the European Central Bank, appointed to the post last November with the sole purpose of averting a potentially disastrous default by the eurozone member."It has been impossible not to cut pensions," said Papademos, a former vice president of the European Central Bank, appointed to the post last November with the sole purpose of averting a potentially disastrous default by the eurozone member.
Ministers also worked to sign off reforms ahead of their submission to parliament this week.Ministers also worked to sign off reforms ahead of their submission to parliament this week.
Larry Elliott argues that the conflict over Greece's bailout has Tolkienian overtones:Larry Elliott argues that the conflict over Greece's bailout has Tolkienian overtones:
There's a scene in The Lord of the Rings where the wizard Gandalf confronts the Balrog, a hellish monster, on a narrow bridge in the Mines of Moria. The battle ends with Gandalf smiting the bridge with his staff, sending the Balrog plunging into a fathomless abyss.There's a scene in The Lord of the Rings where the wizard Gandalf confronts the Balrog, a hellish monster, on a narrow bridge in the Mines of Moria. The battle ends with Gandalf smiting the bridge with his staff, sending the Balrog plunging into a fathomless abyss.
There's a twist to the tail, however. As the monster falls, one last swish of its whip curls round Gandalf's ankle and drags him down into the pit as well. Views may differ, in the context of the eurozone debt crisis, whether Greece is Gandalf or the Balrog, but one thing is for certain; the risks of mutually assured destruction are high.There's a twist to the tail, however. As the monster falls, one last swish of its whip curls round Gandalf's ankle and drags him down into the pit as well. Views may differ, in the context of the eurozone debt crisis, whether Greece is Gandalf or the Balrog, but one thing is for certain; the risks of mutually assured destruction are high.
And Julia Kollewe explains how Greece's debt swap with its private creditors will work.And Julia Kollewe explains how Greece's debt swap with its private creditors will work.
8.10am: The meeting of eurogroup finance ministers in Brussels is the main event on the agenda today. We'll also learn how much the European Central Bank spent buying up government debt last week.8.10am: The meeting of eurogroup finance ministers in Brussels is the main event on the agenda today. We'll also learn how much the European Central Bank spent buying up government debt last week.
• Eurogroup meeting begins: 2:30pm GMT / 3.30pm CET
• ECB weekly bond-buying data: 2:30pm GMT / 3.30pm CET		• Eurogroup meeting begins: 2:30pm GMT / 3.30pm CET
• ECB weekly bond-buying data: 2:30pm GMT / 3.30pm CET
France, the Netherlands and the UK are all selling government debt this morning.....France, the Netherlands and the UK are all selling government debt this morning.....
8.05am: Good morning, and welcome to our rolling coverage of the eurozone debt crisis.8.05am: Good morning, and welcome to our rolling coverage of the eurozone debt crisis.
It's decision time for Greece. Later today, eurozone finance ministers meeting in Brussels must decide whether the country has done enough to receive its second bailout package. The Greek prime minister Lucas Papademos has flown to Belgium to press the flesh and assure the Eurogroup that Greece will deliver on its pledges.It's decision time for Greece. Later today, eurozone finance ministers meeting in Brussels must decide whether the country has done enough to receive its second bailout package. The Greek prime minister Lucas Papademos has flown to Belgium to press the flesh and assure the Eurogroup that Greece will deliver on its pledges.
Over the weekend, Papademos's cabinet approved further spending cuts demanded by his lenders. But there are rumours of discord within Europe, and concern that the €130bn package is no longer big enough to put Greece on a path to a sustainable future.Over the weekend, Papademos's cabinet approved further spending cuts demanded by his lenders. But there are rumours of discord within Europe, and concern that the €130bn package is no longer big enough to put Greece on a path to a sustainable future.
We'll be tracking all the action in Brussels, as well as bringing you reaction and analysis from across Europe.We'll be tracking all the action in Brussels, as well as bringing you reaction and analysis from across Europe.
We'll also keep an eye on Spain, where hundreds of thousands of people took to the streets on Sunday to demonstrate against austerity, spending cuts and labour reforms.We'll also keep an eye on Spain, where hundreds of thousands of people took to the streets on Sunday to demonstrate against austerity, spending cuts and labour reforms.