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| Eurozone crisis live: Bundesbank blasts ECB ahead of EU summit | |
| (40 minutes later) | |
| 8.32am: Mario Monti, Italy's technocratic prime minister, has warned that reforming the Italian economy will take many years. | |
| Monti, who is aiming to erase Italy's deficit in 2013, said in a Bloomberg interview broadcast this morning that he can only begin the task of deregulating the economy and overhauling its welfare system. | |
| The former EU commissioner, who is expected to only serve one term as PM, said: | |
| We will not complete a generational change -- that is, a change which normally requires a generation -- in 12 or 15 months...But it's important to kick-start it. | |
| Here's a clip of the interview: | |
| Monti has repeatedly promised to liberalise the schlerotic Italian economy, just as soon as he'd implemented tough spending cuts. But, as our correspondent Tom Kington reports from Rome, Monti's much heralded liberalisation plan was looking like a damp squib this week after Italy's tough business lobbies fought hard to water down the measures: | |
| The bill, which emerged from Senate commission hearings earlier this week and is due to be voted on in the Senate, reveals Italy's taxi drivers have got one over the prime minister who humbled Microsoft when he was the EU's competition commissioner. | |
| Original plans to give the right to determine taxi fleet numbers in Italian cities to a national authority were killed off, meaning local mayors maintain that right and will be unlikely to risk taxi drivers' votes by upping numbers, which is bad news for anyone who has tried to call a cab in Rome on a rainy night. | |
| Tom says that Maurizio Gasparri, a former minister in Silvio Berlusconi's government, was in the forefront of the fight to keep the cabbies happy. Monti has also faced an army of lobbyists representing other business groups who "prowled the corridors outside the Senate commission, buttonholing senators when they dared to go to the bathroom". | |
| The scene, said Corriere della Sera, was a part souk, part tube station. | |
| Tom continues: | |
| Italian lawyers and architects have also been able to scotch plans hatched by the government to force them to give clients estimates for services. | |
| One Italian think tank, the Bruno Leoni Institute, said, the watering down of the liberalisation package proves that Italy is "unreformable". | |
| 8.18am: Germany's patience with Mario Draghi may finally have snapped. | |
| The president of the Bundesbank, Jens Weidmann, has warned the European Central Bank president that yesterday's Long Term Refinancing Operation (in which €529bn was loaned to European banks on generous terms) poses significant dangers to the eurozone economy. In a letter to Draghi, Weidmann urged the ECB boss to return to safer monetary policies. | |
| The letter was revealed by Germany's Frankfurter Allgemeine Zeitung. It says that Weidmann warned that the ECB is risking its reputation, and was wrong to relax its collateral rules – which means banks can put up a wider range of assets in return for their loans. | |
| Weidmann also warned that if banks are unable to repay these loans in three years time, the individual central banks who stand behind the ECB could not cover the losses. As Frankfurter Allgemeine Zeitung points out: | |
| The letter is evidence of the growing unrest in the Bundesbank. | |
| The letter comes as the boss of Standard Chartered, Peter Sands, warned that central bankers are sowing the seeds of the next crisis by offering so much liquidity today. | |
| As we report here: | |
| Breaking ranks from his fellow bosses, Sands, whose bank is focused mainly in Asia, said: "Banks are still going to have to refinance their loans in three years time. It's not clear what the exit strategy is, nor is it possible to predict what the long-term consequences will be." | |
| He added that the crisis and the west's policy response had accelerated the shift in "power and dynamism" from the developed world to emerging markets. | |
| 8.05am: Although the EU summit doesn't begin until this afternoon, we should hear from Angela Merkel shortly. There's also plenty of economic news this morning, and Ben Bernanke will be testifying to Congress again. | 8.05am: Although the EU summit doesn't begin until this afternoon, we should hear from Angela Merkel shortly. There's also plenty of economic news this morning, and Ben Bernanke will be testifying to Congress again. |
| Here's the agenda: | Here's the agenda: |
• Eurozone manufacturing PMI data - 9am GMT • UK manufacturing PMI data - 9.30am GMT • Eurozone unemployment data for January - 10am GMT • Eurogroup meets to discuss Greece - 1pm GMT • Ben Bernanke testifies to the Senate banking committee - from 3pm • EU summit begins in Brussels - from | • Angela Merkel addresses Bundestag on EU Summit agenda - from 8am GMT • Eurozone manufacturing PMI data - 9am GMT • UK manufacturing PMI data - 9.30am GMT • Eurozone unemployment data for January - 10am GMT • Eurogroup meets to discuss Greece - 1pm GMT • Ben Bernanke testifies to the Senate banking committee - from 3pm • EU summit begins in Brussels - from 4pm |
| 7.55am: Good morning, and welcome to our rolling coverage of the eurozone debt crisis. | 7.55am: Good morning, and welcome to our rolling coverage of the eurozone debt crisis. |
| Later today, EU leaders will convene in Brussels to discuss the European economy. The summit is being billed as a chance to focus on growth and employment – two areas where the EU is struggling. | Later today, EU leaders will convene in Brussels to discuss the European economy. The summit is being billed as a chance to focus on growth and employment – two areas where the EU is struggling. |
| Before the meeting, the eurogroup (finance ministers from across the eurozone) will discuss Greece again – and consider whether it has met the conditions for its second rescue plan. | Before the meeting, the eurogroup (finance ministers from across the eurozone) will discuss Greece again – and consider whether it has met the conditions for its second rescue plan. |
| Another Greek development today: the International Swaps and Derivatives Association (ISDA) which oversees the credit default swap, will consider this morning whether a credit event has occured in Greece. This could finally decide whether Greek credit default swaps are triggered – although we may not get an answer until Monday. | Another Greek development today: the International Swaps and Derivatives Association (ISDA) which oversees the credit default swap, will consider this morning whether a credit event has occured in Greece. This could finally decide whether Greek credit default swaps are triggered – although we may not get an answer until Monday. |
| There's also a backlash gathering pace following the €529bn of cheap loans made by the European Central Bank yesterday. | There's also a backlash gathering pace following the €529bn of cheap loans made by the European Central Bank yesterday. |