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Eurozone crisis live: Tuesday's events as they happened Eurozone crisis live – Tuesday 28 February
(3 days later)
5.24pm: We are bringing this blog to a close for today but will be back tomorrow to follow the ECB's latest liquidity injection, further reaction to Ireland's referendum plan and other events in the single currency area. Thanks for reading and for all the comments today.5.24pm: We are bringing this blog to a close for today but will be back tomorrow to follow the ECB's latest liquidity injection, further reaction to Ireland's referendum plan and other events in the single currency area. Thanks for reading and for all the comments today.
To sum up the main news today:
• Ireland is to hold a referendum on EU fiscal compact
• ISDA is to rule on whether Greek debt CDS should pay out
• The IMF has approved the latest $4.33bn tranche to Ireland
• Italy has sold €6.25bn bonds at lower yields
• Portugal has passed a third bailout review
• The FTSE 100 has closed up just 12 points at 5928 after a fairly lacklustre day of trading but over on Wall Street the Dow Jones Industrial Average has just pushed through the 13,000 mark and is up around 20 points		To sum up the main news today:
• Ireland is to hold a referendum on EU fiscal compact
• ISDA is to rule on whether Greek debt CDS should pay out
• The IMF has approved the latest $4.33bn tranche to Ireland
• Italy has sold €6.25bn bonds at lower yields
• Portugal has passed a third bailout review
• The FTSE 100 has closed up just 12 points at 5928 after a fairly lacklustre day of trading but over on Wall Street the Dow Jones Industrial Average has just pushed through the 13,000 mark and is up around 20 points
4.38pm: Henry McDonald in Dublin sends us more analysis and some details on timing of a referendum in Ireland:4.38pm: Henry McDonald in Dublin sends us more analysis and some details on timing of a referendum in Ireland:
The plebescite on the EU Fiscal Compact would have to be held at latest by June and at the earliest by Easter.The plebescite on the EU Fiscal Compact would have to be held at latest by June and at the earliest by Easter.
The Attorney General's advice clearly came about after she considered if the changes to EU Fiscal policy had any impact on Irish sovereignty. Under Ireland's 1936 Constitution any international treaty which might alter that sovereignty has to be put to the people in a referendum.The Attorney General's advice clearly came about after she considered if the changes to EU Fiscal policy had any impact on Irish sovereignty. Under Ireland's 1936 Constitution any international treaty which might alter that sovereignty has to be put to the people in a referendum.
The Fine Gael-Labour coalition will be banking on fear within the general population that rejecting the treaty would put the Republic on par with Greece and risk more largesse from the ECB and the IMF to shore up the country's economy. The government will be boosted by the fact that the main opposition party in the Dail Fianna Fail will in all likelihood also urge a Yes vote. That call may be amplified at the Fianna Fail annual conference/Ard Fheis this wekeend - the party's first since its historic hammering at the polls last year.The Fine Gael-Labour coalition will be banking on fear within the general population that rejecting the treaty would put the Republic on par with Greece and risk more largesse from the ECB and the IMF to shore up the country's economy. The government will be boosted by the fact that the main opposition party in the Dail Fianna Fail will in all likelihood also urge a Yes vote. That call may be amplified at the Fianna Fail annual conference/Ard Fheis this wekeend - the party's first since its historic hammering at the polls last year.
4.31pm: Heather Stewart, economics editor of the Observer shares these thoughts on the implications of the Irish referendum on the new EU fiscal compact:4.31pm: Heather Stewart, economics editor of the Observer shares these thoughts on the implications of the Irish referendum on the new EU fiscal compact:

Technically, a no vote need not be catastrophic, because only nine countries need to ratify the fiscal compact for it to come into effect - that's one of the safety valves eurozone leaders built into the original agreement.
Technically, a no vote need not be catastrophic, because only nine countries need to ratify the fiscal compact for it to come into effect - that's one of the safety valves eurozone leaders built into the original agreement.
However, a "no" would deal a fresh blow to the euro project, by underlining its unpopularity in a country once seen to have benefited greatly from membership. It would also raise questions about a key part of the "firewall" meant to safeguard the future of the single currency.However, a "no" would deal a fresh blow to the euro project, by underlining its unpopularity in a country once seen to have benefited greatly from membership. It would also raise questions about a key part of the "firewall" meant to safeguard the future of the single currency.
For that reason, Dublin is likely to use the prospect of a defeat at the polls to try and extract more concessions from Brussels over its bailout package - something Enda Kenny's government was elected to do, but with little success thus far.For that reason, Dublin is likely to use the prospect of a defeat at the polls to try and extract more concessions from Brussels over its bailout package - something Enda Kenny's government was elected to do, but with little success thus far.
Just a small update to this post, it is in fact 12 countries that need to ratify the compact, not nine.Just a small update to this post, it is in fact 12 countries that need to ratify the compact, not nine.
4.29pm: Ahead of tomorrow's European Central Bank liquidity injection tomorrow - long-term refinancing operation (LTRO) - we have been receiving a few previews from economists and I thought a round-up of them may be useful. Just to re-cap, at the first wave of the LTRO was in December when more than 500 banks borrowed almost €500bn (£417bn) in cheap three-year loans from the European Central Bank (ECB). The latest Reuters poll consensus for this second wave is for a take-up of €492bn.4.29pm: Ahead of tomorrow's European Central Bank liquidity injection tomorrow - long-term refinancing operation (LTRO) - we have been receiving a few previews from economists and I thought a round-up of them may be useful. Just to re-cap, at the first wave of the LTRO was in December when more than 500 banks borrowed almost €500bn (£417bn) in cheap three-year loans from the European Central Bank (ECB). The latest Reuters poll consensus for this second wave is for a take-up of €492bn.
My colleague Ian Traynor in Brussels has previewed tomorrow's operation which he describes as a "campaign to stabilise the euro, forestall a new credit crunch, and shore up troubled banks".My colleague Ian Traynor in Brussels has previewed tomorrow's operation which he describes as a "campaign to stabilise the euro, forestall a new credit crunch, and shore up troubled banks".
Here are some of the comments that have come in to us on email. Economists at Societe Generale say:Here are some of the comments that have come in to us on email. Economists at Societe Generale say:
We are forecasting a relatively low take-up of €400bn but if it turns out to be larger, this should be seen as a positive signal for risk assets.We are forecasting a relatively low take-up of €400bn but if it turns out to be larger, this should be seen as a positive signal for risk assets.
Jamie Searle at Citi forecasts the second three-year LTRO is likely to have less impact than the first. He adds:Jamie Searle at Citi forecasts the second three-year LTRO is likely to have less impact than the first. He adds:
There will still be plenty of liquidity to put to work, but the market has probably already priced in much of the impact (unlike the first 3yr LTRO
when it took time for the market to understand how bullish it was for EMU spreads).		There will still be plenty of liquidity to put to work, but the market has probably already priced in much of the impact (unlike the first 3yr LTRO
when it took time for the market to understand how bullish it was for EMU spreads).
Jane Foley, senior currency strategist at Rabobank International predicts that if bank demand for funds is considered too large it is possible that "the hackles of credit ratings agencies will be raised. If demand is considered to be too low, then risk appetite could contract."Jane Foley, senior currency strategist at Rabobank International predicts that if bank demand for funds is considered too large it is possible that "the hackles of credit ratings agencies will be raised. If demand is considered to be too low, then risk appetite could contract."
More generally, she comments:More generally, she comments:
ECB data yesterday showed that Spanish and Italian banks increased their holdings of government debt by record amounts in January. The data illustrate that the ECB's LTRO has had the desired effect in offsetting the risk of a buyers' strike and is confirmation of the ECB's success in calming the symptoms of the Sovereign Debt crisis. However, in so far as the ECB has undoubtedly encouraged some of the weakest banks to buy the debt of the most poorly positioned sovereigns within EMU the ECB's actions have clearly not addressed any of the structural problems associated with the eurozone crisis. Another bout of contagion clearly would have the capacity to severely undermine the functioning of both the government debt markets and the banking sector in the weaker EMU regions.ECB data yesterday showed that Spanish and Italian banks increased their holdings of government debt by record amounts in January. The data illustrate that the ECB's LTRO has had the desired effect in offsetting the risk of a buyers' strike and is confirmation of the ECB's success in calming the symptoms of the Sovereign Debt crisis. However, in so far as the ECB has undoubtedly encouraged some of the weakest banks to buy the debt of the most poorly positioned sovereigns within EMU the ECB's actions have clearly not addressed any of the structural problems associated with the eurozone crisis. Another bout of contagion clearly would have the capacity to severely undermine the functioning of both the government debt markets and the banking sector in the weaker EMU regions.
4.07pm: More now from Henry McDonald Dublin on that news this afternoon that Ireland will hold a referendum on the EU fiscal compact:4.07pm: More now from Henry McDonald Dublin on that news this afternoon that Ireland will hold a referendum on the EU fiscal compact:

In his speech Enda Kenny said a Yes vote would mark another step in the rebuilding of Ireland's economy and the country's international reputation.
In his speech Enda Kenny said a Yes vote would mark another step in the rebuilding of Ireland's economy and the country's international reputation.
"It gives the Irish people the opportunity to reaffirm Ireland's commitment to membership of the euro, which remains a fundamental pillar of our economic and jobs strategy. More binding and enforceable fiscal rules as a result of ratification will be good for both Ireland and the wider eurozone, and will cement growing international confidence in Ireland's recovery.""It gives the Irish people the opportunity to reaffirm Ireland's commitment to membership of the euro, which remains a fundamental pillar of our economic and jobs strategy. More binding and enforceable fiscal rules as a result of ratification will be good for both Ireland and the wider eurozone, and will cement growing international confidence in Ireland's recovery."
The Taoiseach added: "In this referendum, the Irish people can confirm our commitment to responsible budgeting and, in doing so, ensure that the reckless economic mismanagement that drove our country to the brink of bankruptcy will not be repeated by any future Government."The Taoiseach added: "In this referendum, the Irish people can confirm our commitment to responsible budgeting and, in doing so, ensure that the reckless economic mismanagement that drove our country to the brink of bankruptcy will not be repeated by any future Government."
3.54pm: Time now for a quick markets round-up. In the UK, the FTSE 100 is bobbing in and out of negative territory as investors try take a view on mixed data out of the United States.3.54pm: Time now for a quick markets round-up. In the UK, the FTSE 100 is bobbing in and out of negative territory as investors try take a view on mixed data out of the United States.
Durable goods orders for January came in much weaker than expected but separate numbers showed consumer confidence in the world's largest economy hit a one-year in February.Durable goods orders for January came in much weaker than expected but separate numbers showed consumer confidence in the world's largest economy hit a one-year in February.
The Conference Board said its index of consumer attitudes increased to 70.8 - the highest reading since February last year - from an upwardly revised 61.5 in January.The Conference Board said its index of consumer attitudes increased to 70.8 - the highest reading since February last year - from an upwardly revised 61.5 in January.
James Knightley at ING Financial Markets comments:James Knightley at ING Financial Markets comments:

This is at levels historically consistent with real consumer spending growth of around 2.5% year-on-year.
This is at levels historically consistent with real consumer spending growth of around 2.5% year-on-year.
The details show that households are becoming more optimistic on the labour market, on their incomes and on general business conditions with the jobs hard to get index at its lowest level since November 2008. This offers hope that the labour market is really showing some improvement and that the unemployment rate can continue moving lower. The risk though is that with oil prices continuing to climb on geopolitical worries this could soon start to erode household purchasing power and be a new source of concern for consumers.The details show that households are becoming more optimistic on the labour market, on their incomes and on general business conditions with the jobs hard to get index at its lowest level since November 2008. This offers hope that the labour market is really showing some improvement and that the unemployment rate can continue moving lower. The risk though is that with oil prices continuing to climb on geopolitical worries this could soon start to erode household purchasing power and be a new source of concern for consumers.
With those mixed signals from the US, the FTSE 100 is up 6 points at 5921. Germany's DAX is up around 20 points at 6869 and France's CAC40 is up 7 points at 3449. On Wall Street, the Dow Jones Industrial Average is up 25 points, or 0.2%, at 13,006.With those mixed signals from the US, the FTSE 100 is up 6 points at 5921. Germany's DAX is up around 20 points at 6869 and France's CAC40 is up 7 points at 3449. On Wall Street, the Dow Jones Industrial Average is up 25 points, or 0.2%, at 13,006.
On currency markets, the euro has given up its earlier gains against the dollar after news of Ireland's referendum on the new EU fiscal compact.On currency markets, the euro has given up its earlier gains against the dollar after news of Ireland's referendum on the new EU fiscal compact.
3.30pm: My colleague Henry McDonald in Dublin has sent us this reaction to that news just in that Ireland will hold a referendum on the new EU fiscal compact:3.30pm: My colleague Henry McDonald in Dublin has sent us this reaction to that news just in that Ireland will hold a referendum on the new EU fiscal compact:
The fate and future of the eurozone is once again in the hands of Irish voters after Ireland's Attorney General recommended that a referendum be held on the EU's latest Fiscal Compact Treaty.The fate and future of the eurozone is once again in the hands of Irish voters after Ireland's Attorney General recommended that a referendum be held on the EU's latest Fiscal Compact Treaty.
Irish Premier Enda Kenny told the Dail this afternoon that on the advice of the Republic's chief law officer the Cabinet was told today that "on balance" a referendum should be held.Irish Premier Enda Kenny told the Dail this afternoon that on the advice of the Republic's chief law officer the Cabinet was told today that "on balance" a referendum should be held.
The Taoiseach said he and his deputy Prime Minister Eamon Gilmore were confident the Irish peole would endorse the EU treaty as this in the country's interest.The Taoiseach said he and his deputy Prime Minister Eamon Gilmore were confident the Irish peole would endorse the EU treaty as this in the country's interest.
Arrangements for organising the referendum would be made in the coming weeks, Kenny told the parliament.Arrangements for organising the referendum would be made in the coming weeks, Kenny told the parliament.
Labour leader who also serves as Foreign Minister Eamon Gilmore said the referendum would come down to a vote for Ireland's economic stability and recovery.Labour leader who also serves as Foreign Minister Eamon Gilmore said the referendum would come down to a vote for Ireland's economic stability and recovery.
Irish voters threw the entire EU reform programme into chaos when they first rejected the Lisbon Treaty although after a series of amendments the Republic's electorate later endorsed a second Lisbon Treaty.Irish voters threw the entire EU reform programme into chaos when they first rejected the Lisbon Treaty although after a series of amendments the Republic's electorate later endorsed a second Lisbon Treaty.
There are fears within the Fine Gael/Labour coalition in Dublin that voters might use the next referendum to punish the government over its domestic policies such as the continuing cost cutting austerity programme and the continued recession with more than 14% of the Irish workforce unemployed.There are fears within the Fine Gael/Labour coalition in Dublin that voters might use the next referendum to punish the government over its domestic policies such as the continuing cost cutting austerity programme and the continued recession with more than 14% of the Irish workforce unemployed.
3.20pm: Some more detail now on that Irish announcement that there will be a referendum on the new EU fiscal compact. In the latest curve ball for German-led plans for tighter budgetary rules to shore up the euro, Irish PM Enda Kenny says that after seeking advice from the Irish attorney general on balance a popular vote is needed.3.20pm: Some more detail now on that Irish announcement that there will be a referendum on the new EU fiscal compact. In the latest curve ball for German-led plans for tighter budgetary rules to shore up the euro, Irish PM Enda Kenny says that after seeking advice from the Irish attorney general on balance a popular vote is needed.
Kenny told parliament:Kenny told parliament:
The Irish people will be asked for their authorisation in a referendum to ratify the european stability treaty.The Irish people will be asked for their authorisation in a referendum to ratify the european stability treaty.
3.06pm: Good afternoon. As I take over from Simon Goodley, we start off with some news just in from Ireland.3.06pm: Good afternoon. As I take over from Simon Goodley, we start off with some news just in from Ireland.
The Irish prime minister has just confirmed the country will indeed require a referendum on the new EU fiscal compact. Arrangements on a vote are to be finalised in coming weeks and the PM says it is strongly in Irish interests the treaty be approved.The Irish prime minister has just confirmed the country will indeed require a referendum on the new EU fiscal compact. Arrangements on a vote are to be finalised in coming weeks and the PM says it is strongly in Irish interests the treaty be approved.
2.19pm: OK - we've had Portugal passing its troika health check, a setback for Merkel in the German courts, Italy flogging a few bonds, rising confidence in the eurozone and the ISDA looking to rule on CDS payments.2.19pm: OK - we've had Portugal passing its troika health check, a setback for Merkel in the German courts, Italy flogging a few bonds, rising confidence in the eurozone and the ISDA looking to rule on CDS payments.
That's probably as much as a simple boy can handle on a February morning, so time for me to hand over to my colleague Katie Allen, who'll be taking you through to close of play...That's probably as much as a simple boy can handle on a February morning, so time for me to hand over to my colleague Katie Allen, who'll be taking you through to close of play...
1.45pm: The European Commission, European Central Bank and the International Monetary Fund have been talking through the medical they've just subjected Portugal to following a visit to Lisbon between February 15-27. The troika reckon the country's making "good progress" with the fiscal deficit target for 2012 remaining "within reach".1.45pm: The European Commission, European Central Bank and the International Monetary Fund have been talking through the medical they've just subjected Portugal to following a visit to Lisbon between February 15-27. The troika reckon the country's making "good progress" with the fiscal deficit target for 2012 remaining "within reach".
Still - as ever with these health checks - there is always scope to do a little better.Still - as ever with these health checks - there is always scope to do a little better.
They say:They say:
Nevertheless, more efforts are needed to clear Portugal's structural reform backlog in the network and sheltered services sectors. Long-standing entry barriers and a web of excessive rents are stifling economic dynamism. The resulting high non-tradable prices not only curb external competitiveness, but also put socially unfair burdens on consumers and taxpayers. First reform successes include measures to level the playing field in the telecommunication sector, and meaningful steps to reduce rents in energy markets, particularly electricity, are underway. Both the pace and scope of these reform efforts should be stepped up.Nevertheless, more efforts are needed to clear Portugal's structural reform backlog in the network and sheltered services sectors. Long-standing entry barriers and a web of excessive rents are stifling economic dynamism. The resulting high non-tradable prices not only curb external competitiveness, but also put socially unfair burdens on consumers and taxpayers. First reform successes include measures to level the playing field in the telecommunication sector, and meaningful steps to reduce rents in energy markets, particularly electricity, are underway. Both the pace and scope of these reform efforts should be stepped up.
12.29pm: Angela Merkel the Germany chancellor looks like she's becoming more and more constrained on future eurozone bailouts, after the country's top court raised a hurdle to swift action in financial rescues.12.29pm: Angela Merkel the Germany chancellor looks like she's becoming more and more constrained on future eurozone bailouts, after the country's top court raised a hurdle to swift action in financial rescues.
The country's constitutional court has ruled that parliament may not delegate most decisions on disbursing bailout funds to a special committee meeting in secret, as Merkel had planned after a previous ruling bolstered lawmakers' oversight powers.The country's constitutional court has ruled that parliament may not delegate most decisions on disbursing bailout funds to a special committee meeting in secret, as Merkel had planned after a previous ruling bolstered lawmakers' oversight powers.
In a case brought by two opposition lawmakers, the court ruled that a nine-member sub-committee created to approve urgent action by the bailout fund was "in large part" unconstitutional because it infringed on the rights of other deputies.In a case brought by two opposition lawmakers, the court ruled that a nine-member sub-committee created to approve urgent action by the bailout fund was "in large part" unconstitutional because it infringed on the rights of other deputies.
The judges added the panel may approve price-sensitive debt purchases on the secondary market by the EFSF bailout fund, since confidentiality was essential in such operations. But they denied it the power to authorise loans or preventive credit lines to troubled states or for the recapitalisation of banks.The judges added the panel may approve price-sensitive debt purchases on the secondary market by the EFSF bailout fund, since confidentiality was essential in such operations. But they denied it the power to authorise loans or preventive credit lines to troubled states or for the recapitalisation of banks.
While not a show-stopper, the decision is likely to mean that parliamentary deliberations on future rescue operations could be slower and more cumbersome, since the full 41-member budget committee or the entire 620-member lower house will have to decide.While not a show-stopper, the decision is likely to mean that parliamentary deliberations on future rescue operations could be slower and more cumbersome, since the full 41-member budget committee or the entire 620-member lower house will have to decide.
11.46am: Nobody likes putting themselves through a medical - so no doubt Portugal finance minister Vitor Gaspar is feeling relieved today.11.46am: Nobody likes putting themselves through a medical - so no doubt Portugal finance minister Vitor Gaspar is feeling relieved today.
Portugal has passed the third review of its €78 bn bailout programme by the European Union and IMF, as it reiterated this year's fiscal goals will be met despite a worsening economic outlook.Portugal has passed the third review of its €78 bn bailout programme by the European Union and IMF, as it reiterated this year's fiscal goals will be met despite a worsening economic outlook.
Gaspar said:Gaspar said:
The result was positive despite unfavourable conditions. The mission confirmed the fulfillment of the criteria demanded by the terms.The result was positive despite unfavourable conditions. The mission confirmed the fulfillment of the criteria demanded by the terms.
He added that the inspectors will recommend the disbursement of a new tranche of €14.6bn.He added that the inspectors will recommend the disbursement of a new tranche of €14.6bn.
11.39am: Here's a date to strike from you diary. The leaders of the 17 eurozone countries have delayed a decision on whether to give their bailout funds more firepower.11.39am: Here's a date to strike from you diary. The leaders of the 17 eurozone countries have delayed a decision on whether to give their bailout funds more firepower.
The group was expected to meet to decide whether the currency's bailout funds would be allowed to give more than €500bn in loans on Friday afternoon - but maybe they all need to slip off for the weekend as they'll now look at this later in March.The group was expected to meet to decide whether the currency's bailout funds would be allowed to give more than €500bn in loans on Friday afternoon - but maybe they all need to slip off for the weekend as they'll now look at this later in March.
The decision was highly anticipated as concerns mount that the safety net - which is already supporting Greece, Ireland and Portugal - is too weak to catch large other strugglers like Italy or Spain.The decision was highly anticipated as concerns mount that the safety net - which is already supporting Greece, Ireland and Portugal - is too weak to catch large other strugglers like Italy or Spain.
The European Commission, the International Monetary Fund and several euro countries want the new, permanent bailout fund, the European Stability Mechanism, to run in parallel with its predecessor, the European Financial Stability Facility.The European Commission, the International Monetary Fund and several euro countries want the new, permanent bailout fund, the European Stability Mechanism, to run in parallel with its predecessor, the European Financial Stability Facility.
11.09am: Italy has sold €6.25bn of five and ten year bonds - getting solid support with investors anticipating a fresh rally ahead of a fresh injection of liquidity by the ECB later this week.11.09am: Italy has sold €6.25bn of five and ten year bonds - getting solid support with investors anticipating a fresh rally ahead of a fresh injection of liquidity by the ECB later this week.
The 10 year bond came in at an average yield of 5.5%, down from 6.08% last month, and raised €3.75bn. The remaining €2.5bn of five year notes will yield 4.19%, the lowest since May 2011.The 10 year bond came in at an average yield of 5.5%, down from 6.08% last month, and raised €3.75bn. The remaining €2.5bn of five year notes will yield 4.19%, the lowest since May 2011.
Michael Leister of DZ Bank, says:Michael Leister of DZ Bank, says:
Clearly here we see the effect of domestic support and also of the ECB liquidity environment.Clearly here we see the effect of domestic support and also of the ECB liquidity environment.
However, Marc Oswald of Monument Securities, counters:However, Marc Oswald of Monument Securities, counters:
The cover, as ever, was not exactly overwhelming, but they've sold the total volume that they wanted. The fact that the cover in the five-year wasn't particularly more than in January seems to nix the argument that the auction's been well-bid on the back of tomorrow's LTRO.The cover, as ever, was not exactly overwhelming, but they've sold the total volume that they wanted. The fact that the cover in the five-year wasn't particularly more than in January seems to nix the argument that the auction's been well-bid on the back of tomorrow's LTRO.
10.42am: It's not just Germany where sentiment is rising. Confidence in the eurozone economy has risen for a second consecutive month, which optimists hope signals only a mild recession during 2012.10.42am: It's not just Germany where sentiment is rising. Confidence in the eurozone economy has risen for a second consecutive month, which optimists hope signals only a mild recession during 2012.
European Commission economic sentiment indicator has ticked up one point to 94.4 - better than the 93.9 forecast.European Commission economic sentiment indicator has ticked up one point to 94.4 - better than the 93.9 forecast.
Here's Howard Archer, chief european economist at IHS Global Insight:
Here's Howard Archer, chief european economist at IHS Global Insight:
A second successive modest increase in eurozone business and consumer confidence in February supports hopes that the eurozone economy is past the worst after GDP contracted by 0.3% in the fourth quarter of 2011. Even so, sentiment is still at a pretty low level and the eurozone is far from out of the economic woods. Indeed, we suspect that further eurozone GDP contraction is more likely than not in the first quarter of 2012.

Muted domestic economic activity, intensified fiscal tightening in many countries and still serious uncertainties and concerns over the Eurozone sovereign debt crisis continue to limit the upside for sentiment, while consumers are additionally worried over jobs. Consumers' purchasing intentions remain limited and weakened in February while businesses' employment expectations remain well below the levels seen in the early months of 2011 and were also generally softer in February.		A second successive modest increase in eurozone business and consumer confidence in February supports hopes that the eurozone economy is past the worst after GDP contracted by 0.3% in the fourth quarter of 2011. Even so, sentiment is still at a pretty low level and the eurozone is far from out of the economic woods. Indeed, we suspect that further eurozone GDP contraction is more likely than not in the first quarter of 2012.

Muted domestic economic activity, intensified fiscal tightening in many countries and still serious uncertainties and concerns over the Eurozone sovereign debt crisis continue to limit the upside for sentiment, while consumers are additionally worried over jobs. Consumers' purchasing intentions remain limited and weakened in February while businesses' employment expectations remain well below the levels seen in the early months of 2011 and were also generally softer in February.

He adds:
He adds:
[the rise in confidence] reinforces belief that the ECB will remain firmly in "wait and see" mode at next week's March policy meeting and will keep interest rates unchanged at 1.00% in the near-term at least.[the rise in confidence] reinforces belief that the ECB will remain firmly in "wait and see" mode at next week's March policy meeting and will keep interest rates unchanged at 1.00% in the near-term at least.
9.58am: A quick explanation on the ECB's (temporary) decision to suspend Greek collateral.9.58am: A quick explanation on the ECB's (temporary) decision to suspend Greek collateral.
This is from the prolific Louise Cooper at BGC Partners:This is from the prolific Louise Cooper at BGC Partners:
My take is that it is just a technical response due to the fact that certain ratings agencies have lowered Greek ratings to SD [selective default] as CACs [collective-action clauses] have been introduced to some types of Greek government bonds.

The collateral will still be acceptable by the Greek central bank under 'emergency liquidity measures' and are expected to be acceptable to the ECB again once the 'collateral enhancement scheme' (EFSF buy-back scheme) is launched later this month.		My take is that it is just a technical response due to the fact that certain ratings agencies have lowered Greek ratings to SD [selective default] as CACs [collective-action clauses] have been introduced to some types of Greek government bonds.

The collateral will still be acceptable by the Greek central bank under 'emergency liquidity measures' and are expected to be acceptable to the ECB again once the 'collateral enhancement scheme' (EFSF buy-back scheme) is launched later this month.
Greece is seeking to swap more than €200bn in outstanding bonds for new debt in an effort to reduce its borrowing costs and reduce long-term debt. If Greece didn't get enough investors to agree to that deal, it would face default.Greece is seeking to swap more than €200bn in outstanding bonds for new debt in an effort to reduce its borrowing costs and reduce long-term debt. If Greece didn't get enough investors to agree to that deal, it would face default.
The CACs offer ways around that risk, by requiring all bond holders to participate in a bond exchange if a specified majority approves. However, that means the restructuring will not be voluntary and S&P has said just adding that clause retroactively to bonds, even if it isn't used, is enough to consider the terms of the bonds significantly altered and thus to place them in selective default.The CACs offer ways around that risk, by requiring all bond holders to participate in a bond exchange if a specified majority approves. However, that means the restructuring will not be voluntary and S&P has said just adding that clause retroactively to bonds, even if it isn't used, is enough to consider the terms of the bonds significantly altered and thus to place them in selective default.
9.36am: Here's one for eurozone crisis aficionados who love the detail behind how this whole thing plays out.9.36am: Here's one for eurozone crisis aficionados who love the detail behind how this whole thing plays out.
There's an intriguing story running on WSJ.com(£) concerning whether pay-outs on credit default swaps on Greek debt are to be honoured.There's an intriguing story running on WSJ.com(£) concerning whether pay-outs on credit default swaps on Greek debt are to be honoured.
It begins:It begins:
An unidentified market participant has asked a committee of the International Swaps and Derivatives Association to rule on whether the passage of legislation approving collective-action clauses for Greek debt should trigger payouts on credit-default swaps tied to Greek sovereign bonds.An unidentified market participant has asked a committee of the International Swaps and Derivatives Association to rule on whether the passage of legislation approving collective-action clauses for Greek debt should trigger payouts on credit-default swaps tied to Greek sovereign bonds.
At stake are payouts from sellers of a net $3.2 billion of CDS on Greece currently outstanding, and the stigma associated with lending credence to an instrument policymakers have long reviled.At stake are payouts from sellers of a net $3.2 billion of CDS on Greece currently outstanding, and the stigma associated with lending credence to an instrument policymakers have long reviled.
ISDA said in a statement the Determinations Committee will decide by 5 p.m. GMT on Wednesday "whether to accept the question for deliberation or reject it." Only after the committee has opted to review the case would the committee then consider whether sellers of Greek CDS should pay buyers of the protection.ISDA said in a statement the Determinations Committee will decide by 5 p.m. GMT on Wednesday "whether to accept the question for deliberation or reject it." Only after the committee has opted to review the case would the committee then consider whether sellers of Greek CDS should pay buyers of the protection.
8.44am: This from the European Central Bank this morning. Presumably this is all to do with the private sector involvement part of the bailout 2.0 agreement...8.44am: This from the European Central Bank this morning. Presumably this is all to do with the private sector involvement part of the bailout 2.0 agreement...
28 February 2012 - Eligibility of Greek bonds used as collateral in Eurosystem monetary policy operations28 February 2012 - Eligibility of Greek bonds used as collateral in Eurosystem monetary policy operations
The Governing Council of the European Central Bank (ECB) has decided to temporarily suspend the eligibility of marketable debt instruments issued or fully guaranteed by the Hellenic Republic for use as collateral in Eurosystem monetary policy operations. This decision takes into account the rating of the Hellenic Republic as a result of the launch of the private sector involvement offer.The Governing Council of the European Central Bank (ECB) has decided to temporarily suspend the eligibility of marketable debt instruments issued or fully guaranteed by the Hellenic Republic for use as collateral in Eurosystem monetary policy operations. This decision takes into account the rating of the Hellenic Republic as a result of the launch of the private sector involvement offer.
At the same time, the Governing Council decided that the liquidity needs of affected Eurosystem counterparties can be satisfied by the relevant national central banks, in line with relevant Eurosystem arrangements (emergency liquidity assistance).At the same time, the Governing Council decided that the liquidity needs of affected Eurosystem counterparties can be satisfied by the relevant national central banks, in line with relevant Eurosystem arrangements (emergency liquidity assistance).
Marketable debt instruments issued or fully guaranteed by the Hellenic Republic will become in principle eligible upon activation of the collateral enhancement scheme agreed by the Heads of State or Government of the euro area on 21 July 2011, and confirmed on 26 October 2011, together with a number of other measures aimed at assisting Greece in its adjustment programme. This is expected to take place by mid-March 2012.Marketable debt instruments issued or fully guaranteed by the Hellenic Republic will become in principle eligible upon activation of the collateral enhancement scheme agreed by the Heads of State or Government of the euro area on 21 July 2011, and confirmed on 26 October 2011, together with a number of other measures aimed at assisting Greece in its adjustment programme. This is expected to take place by mid-March 2012.
8.37am: It's pay day for Ireland, as the International Monetary Fund has approved a $4.33bn loan to the Celtic-tiger-turned-tigger - the latest instalment in a three-year $30.23bn programme to support the country through a period of tough financial reforms.8.37am: It's pay day for Ireland, as the International Monetary Fund has approved a $4.33bn loan to the Celtic-tiger-turned-tigger - the latest instalment in a three-year $30.23bn programme to support the country through a period of tough financial reforms.
Ireland seems to have behaved itself well enough to receive its pocket money, according to IMF first deputy managing director David Lipton. He says:Ireland seems to have behaved itself well enough to receive its pocket money, according to IMF first deputy managing director David Lipton. He says:
The Irish authorities have continued strong implementation of their programme despite deteriorating external conditions.The Irish authorities have continued strong implementation of their programme despite deteriorating external conditions.
At the same time, the challenges Ireland faces have intensified since the outset of the programme, with growth expected to ease to about 0.5% in 2012 owing to a slowing in trading partner activity.At the same time, the challenges Ireland faces have intensified since the outset of the programme, with growth expected to ease to about 0.5% in 2012 owing to a slowing in trading partner activity.
The Irish authorities have responded by raising the fiscal consolidation effort adopted in Budget 2012, and the budget remains on track to meet an unchanged general government deficit target of 8.6% of GDP. If growth should weaken further, the automatic stabilisers should be allowed to operate to help avoid jeopardizing the fragile recoveryThe Irish authorities have responded by raising the fiscal consolidation effort adopted in Budget 2012, and the budget remains on track to meet an unchanged general government deficit target of 8.6% of GDP. If growth should weaken further, the automatic stabilisers should be allowed to operate to help avoid jeopardizing the fragile recovery

The IMF programme was approved in December 2010 as part of a larger $114bn financing package supported by the European Financial Stabilisation Mechanism, the European Financial Stability Facility, loans from the UK, Sweden and Denmark and Ireland's own contributions.
The IMF programme was approved in December 2010 as part of a larger $114bn financing package supported by the European Financial Stabilisation Mechanism, the European Financial Stability Facility, loans from the UK, Sweden and Denmark and Ireland's own contributions.
8.17am: Upbeat news from Germany - which is always assured to raise the spirits of everybody else in Europe.8.17am: Upbeat news from Germany - which is always assured to raise the spirits of everybody else in Europe.
German consumer confidence has increased again, its sixth rise on the bounce. The country's GfK index has increased to 6.0, its highest level since March 2011, as households said they felt significantly more positive about the prospect for their incomes.German consumer confidence has increased again, its sixth rise on the bounce. The country's GfK index has increased to 6.0, its highest level since March 2011, as households said they felt significantly more positive about the prospect for their incomes.
ING's Carsten Brzeski reckons:ING's Carsten Brzeski reckons:
Looking at the available components shows that income expectations have increased significantly, while the German willingness to buy dropped somewhat. Today's increase bodes well for a further stabilisation of private consumption throughout 2012.Looking at the available components shows that income expectations have increased significantly, while the German willingness to buy dropped somewhat. Today's increase bodes well for a further stabilisation of private consumption throughout 2012.
Although it is often said that the way to the German heart is through his car, the latest increase of fuel prices, approaching last year's record highs, has not undermined consumer confidence. Greek crisis, high fuel prices; it looks as if nothing can shatter German confidence. At least for the time being, the Eurozone biggest economy looks like a country full of optimists.Although it is often said that the way to the German heart is through his car, the latest increase of fuel prices, approaching last year's record highs, has not undermined consumer confidence. Greek crisis, high fuel prices; it looks as if nothing can shatter German confidence. At least for the time being, the Eurozone biggest economy looks like a country full of optimists.
7.47am: Here's Michael Hewson, senior market analyst at CMC Markets UK, reacting to yesterday's events.7.47am: Here's Michael Hewson, senior market analyst at CMC Markets UK, reacting to yesterday's events.
On S&P grading Greece "SD" (see below):On S&P grading Greece "SD" (see below):
The market's reaction was one of complete indifference, such is the reality of life in this latest, but not unexpected twist in what has become the almost everyday routine of the European debt crisis.The market's reaction was one of complete indifference, such is the reality of life in this latest, but not unexpected twist in what has become the almost everyday routine of the European debt crisis.

And on the vote passing the Greek bailout in the German parliament:
And on the vote passing the Greek bailout in the German parliament:
Even though this bailout made it through the German parliament it is becoming very apparent that the German public is losing faith in the current bailout policy, and politicians worried about re-election could well start to reflect this mood. As such the scope for further bailout cash could well be much more difficult to attain as public opinion swings against further taxpayer cash for other European countries.Even though this bailout made it through the German parliament it is becoming very apparent that the German public is losing faith in the current bailout policy, and politicians worried about re-election could well start to reflect this mood. As such the scope for further bailout cash could well be much more difficult to attain as public opinion swings against further taxpayer cash for other European countries.
7.42am: Morning all.7.42am: Morning all.
It seems highly unlikely that you weren't all tuned in until past 9pm yesterday, but those who had something better to do may have missed Standard & Poor's issuing perhaps the only credit rating you'd never heard of.It seems highly unlikely that you weren't all tuned in until past 9pm yesterday, but those who had something better to do may have missed Standard & Poor's issuing perhaps the only credit rating you'd never heard of.
Greece is now classed "selective default", or SD, which is one for the Panini sticker album. The move followed the Greek government's decision to add "collective action clauses" to its bonds, which give Athens the authority to force bondholders to take part in its debt restructuring, if they declined to take a voluntary haircut on their loans.Greece is now classed "selective default", or SD, which is one for the Panini sticker album. The move followed the Greek government's decision to add "collective action clauses" to its bonds, which give Athens the authority to force bondholders to take part in its debt restructuring, if they declined to take a voluntary haircut on their loans.
Standard and Poor's also put the rating of the EFSF bailout fund on a negative outlook, in line with its ratings on France and Austria.Standard and Poor's also put the rating of the EFSF bailout fund on a negative outlook, in line with its ratings on France and Austria.
The ratings tinkering came after a day in which the German parliament nodded through Greece bailout 2.0 - voting the plan through by 496 votes to 90, with five abstentions.The ratings tinkering came after a day in which the German parliament nodded through Greece bailout 2.0 - voting the plan through by 496 votes to 90, with five abstentions.
After the German vote, it is time of the Finns to debate the package today and then vote on it tomorrow.After the German vote, it is time of the Finns to debate the package today and then vote on it tomorrow.
And also today:And also today:
• The latest German inflation numbers with CPI for February expected to slip back slightly from 2.3% to 2.2%, while German Gfk consumer confidence for March is expected to pick up slightly from 5.9 to 6.• The latest German inflation numbers with CPI for February expected to slip back slightly from 2.3% to 2.2%, while German Gfk consumer confidence for March is expected to pick up slightly from 5.9 to 6.
• The Irish Attorney General could introduce another curve ball into the whole save the eurozone process, with a decision expected today on whether an Irish referendum is required on the new EU fiscal compact.• The Irish Attorney General could introduce another curve ball into the whole save the eurozone process, with a decision expected today on whether an Irish referendum is required on the new EU fiscal compact.
• Portugal is also due to publish its latest financial health check from the troika who have been assessing the country's progress under its €78bn bailout plan.• Portugal is also due to publish its latest financial health check from the troika who have been assessing the country's progress under its €78bn bailout plan.
• Meanwhile, Italy is also set to sell €6.25bn of five and 10 year new bonds with yields expected to fall again - this time below 6% - depressed by the ECB's LTRO programme.• Meanwhile, Italy is also set to sell €6.25bn of five and 10 year new bonds with yields expected to fall again - this time below 6% - depressed by the ECB's LTRO programme.