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Eurozone crisis live: Finance ministers to approve second bailout for Greece Eurozone crisis live: Finance ministers to approve second bailout for Greece
(40 minutes later)
2.59pm: This is Rupert Neate taking over from Julia for a bit.2.59pm: This is Rupert Neate taking over from Julia for a bit.
Greece's tourism minister has just got back from a trip to Berlin to persuade Germans to continue holidaying to the countries islands. Growing ill feeling towards Germans on the streets of Athens and elsewhere has led to a 50% drop in German visitors in November (the latest month available). Greece's tourism minister has just got back from a trip to Berlin to persuade Germans to continue holidaying to the country's islands. Growing ill-feeling towards Germans on the streets of Athens and elsewhere has led to a 50% drop in German visitors in November (the latest month available).
Pavlos Geroulanos, Greece's Minister of Culture and Tourism, took to the stage at the ITB travel trade fair in Berlin to ensure the audience that what one sees on the news "does not reflect general sentiment among Greeks". "The Greeks are very good to the Germans."Pavlos Geroulanos, Greece's Minister of Culture and Tourism, took to the stage at the ITB travel trade fair in Berlin to ensure the audience that what one sees on the news "does not reflect general sentiment among Greeks". "The Greeks are very good to the Germans."
Der Spiegel reports:Der Spiegel reports:
Greece is particularly keen to change the perception that it is unfriendly to Germans. It filled almost an entire hall with white sheets, Aegean blue posters and friendly ambassadors for the country's myriad sights, especially those outside of the conflict-ridden Athens.Greece is particularly keen to change the perception that it is unfriendly to Germans. It filled almost an entire hall with white sheets, Aegean blue posters and friendly ambassadors for the country's myriad sights, especially those outside of the conflict-ridden Athens.
"We want to make sure that whatever bad sentiments there are between the two countries is reversed in the long term," said Pavlos Geroulanos, Greece's Minister of Culture and Tourism amid a white-draped display. What one sees on the news "does not reflect general sentiment among Greeks," insists Geroulanos. "The Greeks are very good to the Germans.""We want to make sure that whatever bad sentiments there are between the two countries is reversed in the long term," said Pavlos Geroulanos, Greece's Minister of Culture and Tourism amid a white-draped display. What one sees on the news "does not reflect general sentiment among Greeks," insists Geroulanos. "The Greeks are very good to the Germans."
Overall visitor arrivals and tourism revenue were up 10 percent in Greece in 2011, but a dip in early seasonal bookings for 2012 is causing concern. "The Greeks are wringing their hands in despair waiting for holidaymakers," said TUI Germany Chief Executive Volker Boettcher, a day before the trade show started.Overall visitor arrivals and tourism revenue were up 10 percent in Greece in 2011, but a dip in early seasonal bookings for 2012 is causing concern. "The Greeks are wringing their hands in despair waiting for holidaymakers," said TUI Germany Chief Executive Volker Boettcher, a day before the trade show started.
"This is a crucial year for us," said Geroulanos. "The best way to help Greece is not with handouts, but by tourism. That makes sure whatever packages are given are working better.""This is a crucial year for us," said Geroulanos. "The best way to help Greece is not with handouts, but by tourism. That makes sure whatever packages are given are working better."


You can read more about Greco-German relations from my trip to Rhodes a couple of weeks back.

You can read more about Greco-German relations from my trip to Rhodes a couple of weeks back.
2.10pm: About a third of the Greek population has now fallen below the poverty line, reports my colleague Jon Henley, who is travelling to Greece this week to talk to 'normal' people for a series called Europe on the breadline. 2.10pm: About a third of the Greek population has now fallen below the poverty line, reports my colleague Jon Henley, who is travelling to Greece this week to talk to normal people for a series called Europe on the breadline.
He is going to Athens first then up to Thessaloniki. He'll be tweeting pictures and interviews along the way using the hashtag #EuroDebtTales, as well as blogging. You can send your personal story to him on Twitter @jonhenley or email him at jon.henley@guardian.co.uk.He is going to Athens first then up to Thessaloniki. He'll be tweeting pictures and interviews along the way using the hashtag #EuroDebtTales, as well as blogging. You can send your personal story to him on Twitter @jonhenley or email him at jon.henley@guardian.co.uk.
12.58pm: The markets now have a template for sovereign default within the eurozone - and attention will switch from Greece to Portugal, says David Miller, partner at Cheviot Asset Management, ahead of the eurogroup's expected approval of Greece's second bailout package later today.12.58pm: The markets now have a template for sovereign default within the eurozone - and attention will switch from Greece to Portugal, says David Miller, partner at Cheviot Asset Management, ahead of the eurogroup's expected approval of Greece's second bailout package later today.
Early indications show that the unofficial price of the 'new' Greek bonds will reflect the possibility of a second default. Markets largely discounted last week's swap.

Now that the markets now have a template for sovereign default within the eurozone, their gaze will switch to Portugal.		Early indications show that the unofficial price of the 'new' Greek bonds will reflect the possibility of a second default. Markets largely discounted last week's swap.

Now that the markets now have a template for sovereign default within the eurozone, their gaze will switch to Portugal.
12.47pm: Here is another missive from our Athens correspondent Helena Smith. Before flying to Brussels for today's crucial meeting of eurozone finance ministers, she reported that Greek finance minister Evangelos Venizelos announced that the deal was the best to be had.12.47pm: Here is another missive from our Athens correspondent Helena Smith. Before flying to Brussels for today's crucial meeting of eurozone finance ministers, she reported that Greek finance minister Evangelos Venizelos announced that the deal was the best to be had.
Venizelos is in robust mood telling reporters he expects a "universal participation" rate by the time the debt swap is completed. "The market knows very well that this offer is unique, it's a very good and profitable offer," he told the American news network CNBC. "This is an absolutely constructive proposal not only from the part of Greece, but also from the part of the so-called official sector."Venizelos is in robust mood telling reporters he expects a "universal participation" rate by the time the debt swap is completed. "The market knows very well that this offer is unique, it's a very good and profitable offer," he told the American news network CNBC. "This is an absolutely constructive proposal not only from the part of Greece, but also from the part of the so-called official sector."
Venizelos, who is expected to be elected head of the socalist Pasok party on 18 March, after throwing his hat into its leadership race over the weekend, may not be finance minister for that much longer. Ahead of today's meeting he dismissed the IASD's declaration that in scoring the debt deal Greece had technically gone into default.

"The credit event and triggering of the CDS (credit default swaps) is something internal. This is a kind of dealing room between banks and financial entities. It's not something important for us as a real economy."

There is furious speculation over whether this will be Venizelos' last appearance as finance minister in Brussels. "It's the million dollar question," said an aide. "Institutionally, there is nothing wrong with him holding both jobs but whenever we ask if he plans to retain the post after the [Pasok] election, he never answers. He just smiles."

Greek officials are confident that the €130bn rescue package will be rubber stamped by eurozone finance ministers later today. "We don't expect any problems," said a member of Venizelos' delegation. "It will be activated."

Meanwhile, Helena says officials in Greece's interim coalition government have brushed aside suggestions that the debt-stricken country will need to be bailed out for a third time, possibly even before the end of the year.

"There is still a financial gap but our hope is that by 2020 we will be able to return to the markets to borrow," an insider confided. "If that is not possible there may be a need for some additional support but to predict what will happen is too premature."

The German finance minister Wolfgang Schäuble raised the spectre of yet more aid for Athens in an interview with the Belgian newspaper De Morgen. With the latest bailout Greece will have received €240bn to date.		Venizelos, who is expected to be elected head of the socalist Pasok party on 18 March, after throwing his hat into its leadership race over the weekend, may not be finance minister for that much longer. Ahead of today's meeting he dismissed the IASD's declaration that in scoring the debt deal Greece had technically gone into default.

"The credit event and triggering of the CDS (credit default swaps) is something internal. This is a kind of dealing room between banks and financial entities. It's not something important for us as a real economy."

There is furious speculation over whether this will be Venizelos' last appearance as finance minister in Brussels. "It's the million dollar question," said an aide. "Institutionally, there is nothing wrong with him holding both jobs but whenever we ask if he plans to retain the post after the [Pasok] election, he never answers. He just smiles."

Greek officials are confident that the €130bn rescue package will be rubber stamped by eurozone finance ministers later today. "We don't expect any problems," said a member of Venizelos' delegation. "It will be activated."

Meanwhile, Helena says officials in Greece's interim coalition government have brushed aside suggestions that the debt-stricken country will need to be bailed out for a third time, possibly even before the end of the year.

"There is still a financial gap but our hope is that by 2020 we will be able to return to the markets to borrow," an insider confided. "If that is not possible there may be a need for some additional support but to predict what will happen is too premature."

The German finance minister Wolfgang Schäuble raised the spectre of yet more aid for Athens in an interview with the Belgian newspaper De Morgen. With the latest bailout Greece will have received €240bn to date.
"Nobody can now exclude that Greece at a single moment may need a third bailout," he was quoted as saying. "I have all confidence that the measures that we have taken and that Greece must now implement -- no simple exercise -- will bring the country on the road to recovery.""Nobody can now exclude that Greece at a single moment may need a third bailout," he was quoted as saying. "I have all confidence that the measures that we have taken and that Greece must now implement -- no simple exercise -- will bring the country on the road to recovery."
11.53am: Time for a lunchtime market round-up.11.53am: Time for a lunchtime market round-up.
European markets are lacklustre following the news that China had a trade shortfall of €31.5bn in February. This has had a negative effect on metal prices, with gold pulling back towards the $1,700 an ounce mark and copper also declining, and mining shares are out of favour.European markets are lacklustre following the news that China had a trade shortfall of €31.5bn in February. This has had a negative effect on metal prices, with gold pulling back towards the $1,700 an ounce mark and copper also declining, and mining shares are out of favour.
Official figures confirming that Italy is in recession didn't help. Europe's third-largest economy shrank by 0.7% in the fourth quarter, following a 0.2% contraction in the third.Official figures confirming that Italy is in recession didn't help. Europe's third-largest economy shrank by 0.7% in the fourth quarter, following a 0.2% contraction in the third.
"Domestic demand is the weakest link, the area hardest hit by fiscal tightening," said Paolo Mameli from Intesa Sanpaolo."Domestic demand is the weakest link, the area hardest hit by fiscal tightening," said Paolo Mameli from Intesa Sanpaolo.
On the bond markets, the new Greek bonds handed to creditors as part of Friday's debt swap have started trading as junk. Investors are now turning their attention to Portugal's 10-year yield which has pulled back from the 14% mark but is still a cause for concern, said Brenda Kelly, senior market strategist at CMC Markets UK.On the bond markets, the new Greek bonds handed to creditors as part of Friday's debt swap have started trading as junk. Investors are now turning their attention to Portugal's 10-year yield which has pulled back from the 14% mark but is still a cause for concern, said Brenda Kelly, senior market strategist at CMC Markets UK.
Markets are waiting for eurozone finance ministers to give the final nod to the €130bn rescue package for Greece. They are meeting at 4pm GMT in Brussels.Markets are waiting for eurozone finance ministers to give the final nod to the €130bn rescue package for Greece. They are meeting at 4pm GMT in Brussels.
11.46am: So eurozone finance ministers are meeting later today (around 4pm GMT) and tomorrow in Brussels to (hopefully) rubber stamp the rest of the €130bn bailout funds for Greece, having already handed over €35.5bn.11.46am: So eurozone finance ministers are meeting later today (around 4pm GMT) and tomorrow in Brussels to (hopefully) rubber stamp the rest of the €130bn bailout funds for Greece, having already handed over €35.5bn.
The IMF board will meet on Thursday to decide its contribution – thought to be €28bn, 14% of the €130bn total. Louise Cooper at BGC Partners says:The IMF board will meet on Thursday to decide its contribution – thought to be €28bn, 14% of the €130bn total. Louise Cooper at BGC Partners says:
What is interesting is that this is below the 27% the IMF paid into the first Greek bailout - €30bn IMF cash out of €110bn bailout. That tells us a lot about Christine Lagarde's thoughts about Greece despite her comment from Friday "Restoring competitiveness and a sustainable fiscal position will require Greece to undertake sustained and deep structural reforms over a prolonged period. The scale and length of the fund's support is a reflection of our determination to remain engaged." Don't actions speak louder than words?What is interesting is that this is below the 27% the IMF paid into the first Greek bailout - €30bn IMF cash out of €110bn bailout. That tells us a lot about Christine Lagarde's thoughts about Greece despite her comment from Friday "Restoring competitiveness and a sustainable fiscal position will require Greece to undertake sustained and deep structural reforms over a prolonged period. The scale and length of the fund's support is a reflection of our determination to remain engaged." Don't actions speak louder than words?
11.43am: If Greece was solved... why are its new bonds trading as junk? asks Louise Cooper, markets analyst at BGC Partners.11.43am: If Greece was solved... why are its new bonds trading as junk? asks Louise Cooper, markets analyst at BGC Partners.

Markets are telling us the Greece still faces a Herculean task… If the country's problems were solved by the biggest ever sovereign restructuring ever and the first default in Western Europe for 60 years - the last one was Italy in 1940 - then why are the new and shiny bonds trading for the first time today as junk?
Markets are telling us the Greece still faces a Herculean task… If the country's problems were solved by the biggest ever sovereign restructuring ever and the first default in Western Europe for 60 years - the last one was Italy in 1940 - then why are the new and shiny bonds trading for the first time today as junk?
There are twenty new bonds with a total (par) value of €66bn - all of them only pay a 2% coupon a year and all are long maturities, with the shortest dated maturing in February 2023, i.e. in 11 years time, and the longest maturity maturing in February 2042, 30 years time. As you can see from the early prices this morning, all are trading at between 23% and 27% of par value:There are twenty new bonds with a total (par) value of €66bn - all of them only pay a 2% coupon a year and all are long maturities, with the shortest dated maturing in February 2023, i.e. in 11 years time, and the longest maturity maturing in February 2042, 30 years time. As you can see from the early prices this morning, all are trading at between 23% and 27% of par value:
NEW GREEK BOND PRICE (percentage of par value)NEW GREEK BOND PRICE (percentage of par value)
2% 02/24/23 Corp 26.62% 02/24/23 Corp 26.6
2% 02/24/24 Corp 26.52% 02/24/24 Corp 26.5
2% 02/24/25 Corp 25.52% 02/24/25 Corp 25.5
2% 02/24/26 Corp 25.52% 02/24/26 Corp 25.5
2% 02/24/27 Corp 25.52% 02/24/27 Corp 25.5
2% 02/24/28 Corp 22.2452% 02/24/28 Corp 22.245
2% 02/24/29 Corp 25.02% 02/24/29 Corp 25.0
2% 02/24/31 Corp 24.52% 02/24/31 Corp 24.5
2% 02/24/32 Corp 24.6152% 02/24/32 Corp 24.615
2% 02/24/33 Corp 24.752% 02/24/33 Corp 24.75
2% 02/24/34 Corp 24.752% 02/24/34 Corp 24.75
2% 02/24/35 Corp 24.752% 02/24/35 Corp 24.75
2% 02/24/36 Corp 24.3352% 02/24/36 Corp 24.335
2% 02/24/37 Corp 24.3302% 02/24/37 Corp 24.330
2% 02/24/38 Corp 24.2502% 02/24/38 Corp 24.250
2% 02/24/39 Corp 24.1252% 02/24/39 Corp 24.125
2% 02/24/40 Corp 24.1252% 02/24/40 Corp 24.125
2% 02/24/41 Corp 24.22% 02/24/41 Corp 24.2
2% 02/24/42 Corp 23.7502% 02/24/42 Corp 23.750
At these prices, the yields (interest rates) of these bonds vary between 13.5% and 18-19%. These are still the highest borrowing costs of any country in the eurozone: the ten year yield for Portugal is 13% (the next highest), Ireland is next at 6.7%, Spain 5% and Italy 4.8%. Greece's borrowing costs are above that of Turkey at a 9.4% yield for ten year debt, and many of the new EU members - Poland, at 5.3%, Czech Republic 3.4%, and even Hungary at 8.5%. Cooper said:At these prices, the yields (interest rates) of these bonds vary between 13.5% and 18-19%. These are still the highest borrowing costs of any country in the eurozone: the ten year yield for Portugal is 13% (the next highest), Ireland is next at 6.7%, Spain 5% and Italy 4.8%. Greece's borrowing costs are above that of Turkey at a 9.4% yield for ten year debt, and many of the new EU members - Poland, at 5.3%, Czech Republic 3.4%, and even Hungary at 8.5%. Cooper said:
This deal has taken months to achieve, inflicted massive pain on bond holders and destroyed significant amounts of political goodwill amongst euro member states and yet it clearly has failed to do the job required – bring Greece's debt to a sustainable level.This deal has taken months to achieve, inflicted massive pain on bond holders and destroyed significant amounts of political goodwill amongst euro member states and yet it clearly has failed to do the job required – bring Greece's debt to a sustainable level.
To be fair the market reaction this morning has been pretty muted – little has traded. However the good news is that there is not massive selling pressure – those banks and funds that participated (voluntarily or otherwise) in the debt swap, have not sold straight out. But then there is not also not a whole load of new buying either - no one thinking that at these prices, these new Greek bonds are a bargain. It has been a very cautious start to trading – many are unsure.To be fair the market reaction this morning has been pretty muted – little has traded. However the good news is that there is not massive selling pressure – those banks and funds that participated (voluntarily or otherwise) in the debt swap, have not sold straight out. But then there is not also not a whole load of new buying either - no one thinking that at these prices, these new Greek bonds are a bargain. It has been a very cautious start to trading – many are unsure.
So the next question is will Greece turnaround and see the yields on these bonds fall and the prices of the bonds rise as the country recovers? Given that Greece has effectively forced its debt holders to take a 75% losses, confidence will take years (if not decades) to restore. In the meantime, the outlook for the Greek economy is pretty dire. My view is that the economy will contact significantly again in 2012 making the debt situation worse than forecast. Athens will be back asking for more money in the future and if it doesn't get it , then it may have no option to default again and exit the euro.So the next question is will Greece turnaround and see the yields on these bonds fall and the prices of the bonds rise as the country recovers? Given that Greece has effectively forced its debt holders to take a 75% losses, confidence will take years (if not decades) to restore. In the meantime, the outlook for the Greek economy is pretty dire. My view is that the economy will contact significantly again in 2012 making the debt situation worse than forecast. Athens will be back asking for more money in the future and if it doesn't get it , then it may have no option to default again and exit the euro.
I do not want to be overly critical of the Greek people – there are many who are suffering. This is a country let down by their political elite who have failed to run the country as a modern European state. And so to end to end today's piece I include the following quote:I do not want to be overly critical of the Greek people – there are many who are suffering. This is a country let down by their political elite who have failed to run the country as a modern European state. And so to end to end today's piece I include the following quote:
"......we will not say that Greeks fight like heroes, but that heroes fight like Greeks" Winston Churchill."......we will not say that Greeks fight like heroes, but that heroes fight like Greeks" Winston Churchill.
And Greece needs heroes now.And Greece needs heroes now.
11.34am: Greece has invited binding bids for the licence to run its state lotteries as part of its plan to raise €19bn from privatisations by 2015.11.34am: Greece has invited binding bids for the licence to run its state lotteries as part of its plan to raise €19bn from privatisations by 2015.
Athens has shortlisted Austrian Lotteries, a joint bid from Sisal, Damco Energy and Damlot and a consortium of Greece's betting monopoly OPAP and foreign groups Lottomatica, Scientific Games and Intralot.Athens has shortlisted Austrian Lotteries, a joint bid from Sisal, Damco Energy and Damlot and a consortium of Greece's betting monopoly OPAP and foreign groups Lottomatica, Scientific Games and Intralot.
The winner of the 12-year licence is expected to be announced by June and would take over early next year. State lotteries made revenues of €348m in 2010 and analysts reckon Greece could get between €400m and €600m from the licence sale.The winner of the 12-year licence is expected to be announced by June and would take over early next year. State lotteries made revenues of €348m in 2010 and analysts reckon Greece could get between €400m and €600m from the licence sale.
Greece also wants to sell off the Athens Hellenikon aiprort and its natural gas company DEPA, but the privatisation programme has been slashed from the original €50bn plan.Greece also wants to sell off the Athens Hellenikon aiprort and its natural gas company DEPA, but the privatisation programme has been slashed from the original €50bn plan.
10.45am: Our Athens correspondent Helena Smith is back on the ground and confirms that the country's political parties are indeed girding for battle ahead of general elections.10.45am: Our Athens correspondent Helena Smith is back on the ground and confirms that the country's political parties are indeed girding for battle ahead of general elections.
After securing what is jubilantly being described here as the "monumental success" of pulling off the biggest debt restructuring in modern history, Greek politicians are now turning their attention, publicly, to going to the polls – even if that is the last thing many in Europe actually want to see happen in Athens.After securing what is jubilantly being described here as the "monumental success" of pulling off the biggest debt restructuring in modern history, Greek politicians are now turning their attention, publicly, to going to the polls – even if that is the last thing many in Europe actually want to see happen in Athens.
The big question is when? Prime minister Lucas Papademos has just begun holding a cabinet meeting of his interim coalition where the issue of dates is bound to be discussed.The big question is when? Prime minister Lucas Papademos has just begun holding a cabinet meeting of his interim coalition where the issue of dates is bound to be discussed.
Before going into the meeting, the government spokesman Pandelis Kapsis, told me the poll could take place "either on the 29th of April (two weeks after Greeks celebrate Orthodox Easter) the 6th of May or 13th May". "It could be either one of those dates," he said. "We will know soon."Before going into the meeting, the government spokesman Pandelis Kapsis, told me the poll could take place "either on the 29th of April (two weeks after Greeks celebrate Orthodox Easter) the 6th of May or 13th May". "It could be either one of those dates," he said. "We will know soon."
Much will depend on when the bond swap scheme, extended to 23 March for bonds held under foreign law, is formally signed and sealed, officials say. The ground-breaking deal is key to unlocking fresh rescue funds for debt-choked Greece – at €130bn the second bailout for the country in as many years.Much will depend on when the bond swap scheme, extended to 23 March for bonds held under foreign law, is formally signed and sealed, officials say. The ground-breaking deal is key to unlocking fresh rescue funds for debt-choked Greece – at €130bn the second bailout for the country in as many years.
The Papademos government, Athens' first multi-aparty administration in over twenty years, was formed with the expressed purposed of securing the rescue program.The Papademos government, Athens' first multi-aparty administration in over twenty years, was formed with the expressed purposed of securing the rescue program.
So for cadres in the centre-right New Democracy party, poised to emerge as the election's biggest winner, it's now "mission complete". "We expect the decision to be made this week," said a party source. "Under the Greek constitution we need three weeks to hold an election campaign so if the private sector deal is formally signed and sealed and the parliament is closed by April 5th we could hold elections on April 29th. If it's much later we will get into the summer which delays all the changes and reforms being asked of us."So for cadres in the centre-right New Democracy party, poised to emerge as the election's biggest winner, it's now "mission complete". "We expect the decision to be made this week," said a party source. "Under the Greek constitution we need three weeks to hold an election campaign so if the private sector deal is formally signed and sealed and the parliament is closed by April 5th we could hold elections on April 29th. If it's much later we will get into the summer which delays all the changes and reforms being asked of us."
Wolfgang Schäuble, the German finance minister, repeated over the weekend that it would be preferable if Greece followed in Italy's shoes and kept its technocrat leader – a view that is shared to some extent by ordinary Greeks as well.Wolfgang Schäuble, the German finance minister, repeated over the weekend that it would be preferable if Greece followed in Italy's shoes and kept its technocrat leader – a view that is shared to some extent by ordinary Greeks as well.
But the New Democrat leader Antonis Samaras says the democratic process of holding elections will be a vital "security valve" for austerity weary Greeks who feel they have had little say in the tumultuous events that have swept their country in recent months. Papademos, a macro-economist and former vice president of the European Central Bank, is the first non-elected head of government in Greece is decades.But the New Democrat leader Antonis Samaras says the democratic process of holding elections will be a vital "security valve" for austerity weary Greeks who feel they have had little say in the tumultuous events that have swept their country in recent months. Papademos, a macro-economist and former vice president of the European Central Bank, is the first non-elected head of government in Greece is decades.
9.35am: Oil prices slipped this morning after four days of gains, as fears over supplies from the Middle East eased. Brent crude oil futures for April fell 55 cents to $125.43 a barrel while US crude was also down 55 cents, at $106.85.9.35am: Oil prices slipped this morning after four days of gains, as fears over supplies from the Middle East eased. Brent crude oil futures for April fell 55 cents to $125.43 a barrel while US crude was also down 55 cents, at $106.85.
Carsten Fritsch, commodity analyst at Commerzbank in Frankfurt, said:Carsten Fritsch, commodity analyst at Commerzbank in Frankfurt, said:
With less emphasis on Iran and the Middle East, the focus is shifting back on to the fundamentals of oil supply and demand.With less emphasis on Iran and the Middle East, the focus is shifting back on to the fundamentals of oil supply and demand.
9.32am: Stock markets have turned positive: the FTSE has inched up nearly three points to 5890. Germany's Dax has climbed nearly 19 points while France's CAC is up almost three points.9.32am: Stock markets have turned positive: the FTSE has inched up nearly three points to 5890. Germany's Dax has climbed nearly 19 points while France's CAC is up almost three points.
9.00am: Italian GDP figures just in. Italy is in recession, according to final data for the fourth quarter from Italy's statistics office ISTAT. The Italian economy shrank by 0.7% in the final three months of last year as previously estimated, following a 0.2% decline in the third quarter. The annual rate for the fourth quarter has been revised up slightly to -0.4% from -0.5%.9.00am: Italian GDP figures just in. Italy is in recession, according to final data for the fourth quarter from Italy's statistics office ISTAT. The Italian economy shrank by 0.7% in the final three months of last year as previously estimated, following a 0.2% decline in the third quarter. The annual rate for the fourth quarter has been revised up slightly to -0.4% from -0.5%.
8.14am: In Greece over the weekend, attention turned from the bond swap to the upcoming general election, as my colleague Graeme Wearden reported. Antonis Samaras of the New Democracy party appeared to launch the campaign on Sunday (even though a date hasn't even been set yet), warning that a coalition government would struggle to implement reforms in Greece. Meanwhile, Evangelos Venizelos emerged as the only candidate to take over the leadership of the socialist Pasok party.8.14am: In Greece over the weekend, attention turned from the bond swap to the upcoming general election, as my colleague Graeme Wearden reported. Antonis Samaras of the New Democracy party appeared to launch the campaign on Sunday (even though a date hasn't even been set yet), warning that a coalition government would struggle to implement reforms in Greece. Meanwhile, Evangelos Venizelos emerged as the only candidate to take over the leadership of the socialist Pasok party.
Analysts fear that a Greek general election could simply deliver more confusion and disharmony, as neither New Democracy nor Pasok (let alone the smaller parties), are likely to win a majority. Here's what Raoul Ruparel of Open Europe told us:Analysts fear that a Greek general election could simply deliver more confusion and disharmony, as neither New Democracy nor Pasok (let alone the smaller parties), are likely to win a majority. Here's what Raoul Ruparel of Open Europe told us:
With the two main parties so heavily tied up with the much maligned austerity package, neither one looks likely to gain an absolute majority on its own. Not only does this dampen hopes for more effective governance in Greece over the next few years but it raises significant questions over the long term viability of the latest bailout agreement struck between Greece and the rest of the eurozone. It wouldn't be surprising to see the new government attempting to renegotiate some, if not all, aspects of the package - that is precisely why suggestions that this package offers a clear solution to Greek woes are premature.With the two main parties so heavily tied up with the much maligned austerity package, neither one looks likely to gain an absolute majority on its own. Not only does this dampen hopes for more effective governance in Greece over the next few years but it raises significant questions over the long term viability of the latest bailout agreement struck between Greece and the rest of the eurozone. It wouldn't be surprising to see the new government attempting to renegotiate some, if not all, aspects of the package - that is precisely why suggestions that this package offers a clear solution to Greek woes are premature.
Furthermore, if the new government fails to achieve a clear and strong majority in the Greek parliament, the next year is likely to be marred by a series of challenging and controversial votes on the implementation of more austerity measures. Such a situation could be detrimental to political and social stability in Greece.Furthermore, if the new government fails to achieve a clear and strong majority in the Greek parliament, the next year is likely to be marred by a series of challenging and controversial votes on the implementation of more austerity measures. Such a situation could be detrimental to political and social stability in Greece.
8.06am: European stock markets have opened lower, as expected, bringing the three-day rally seen last week to an end. News that China had a trade deficit of €31.5bn in February is weighing on markets. The FTSE 100 index in London is down 16 points at 5871, a 0.28% fall. Germany's Dax is down 0.2%; France's CAC has shed 0.3%; Spain's Ibex has opened 0.2% lower while Italy's FTSE MIB has lost 0.4%.8.06am: European stock markets have opened lower, as expected, bringing the three-day rally seen last week to an end. News that China had a trade deficit of €31.5bn in February is weighing on markets. The FTSE 100 index in London is down 16 points at 5871, a 0.28% fall. Germany's Dax is down 0.2%; France's CAC has shed 0.3%; Spain's Ibex has opened 0.2% lower while Italy's FTSE MIB has lost 0.4%.
7.53am: Here are Gary Jenkins' musings on Friday's Greek debt swap and the credit event ruling. Greek credit default swaps won't be activated until next Monday so this is unlikely to cause a panic today.7.53am: Here are Gary Jenkins' musings on Friday's Greek debt swap and the credit event ruling. Greek credit default swaps won't be activated until next Monday so this is unlikely to cause a panic today.
After about 7 hours of deliberation white puffs of smoke were finally spotted coming from the building where the ISDA committee were deliberating whether or not a credit event had occurred with regard to Greek CDS. Yes it took so long I did wonder if they thought they were choosing the next Pope but eventually they made the decision that the market was expecting.After about 7 hours of deliberation white puffs of smoke were finally spotted coming from the building where the ISDA committee were deliberating whether or not a credit event had occurred with regard to Greek CDS. Yes it took so long I did wonder if they thought they were choosing the next Pope but eventually they made the decision that the market was expecting.
As expected ISDA announced that the utilisation of the collective action clauses is a credit event and thus CDS contracts will be triggered. No surprise there. Indeed the whole Greek debt exchange could have been said to have gone as expected. It was always likely that the majority of bondholders would accept the offer on the basis that it was better to get something rather than nothing. It might well have been the case if a large enough number had declined to participate in the exchange Greece would have undergone a disorderly default and it is possible that bondholders would not have been able to recover anything at all. Indeed under that scenario there might also have been a large negative mark to market impact upon investor's holdings of Portuguese, Irish, Italian and Spanish bonds as well. All that plus in some cases political pressure was always likely to lead to a high participation rate. It was also likely that there would be a minority of investors who decided to hold out on the basis that they hoped that if the overwhelming majority backed the deal that Greece might just pay off the small reminder and others who held out in the hope that enough non-participants would trigger CDS.As expected ISDA announced that the utilisation of the collective action clauses is a credit event and thus CDS contracts will be triggered. No surprise there. Indeed the whole Greek debt exchange could have been said to have gone as expected. It was always likely that the majority of bondholders would accept the offer on the basis that it was better to get something rather than nothing. It might well have been the case if a large enough number had declined to participate in the exchange Greece would have undergone a disorderly default and it is possible that bondholders would not have been able to recover anything at all. Indeed under that scenario there might also have been a large negative mark to market impact upon investor's holdings of Portuguese, Irish, Italian and Spanish bonds as well. All that plus in some cases political pressure was always likely to lead to a high participation rate. It was also likely that there would be a minority of investors who decided to hold out on the basis that they hoped that if the overwhelming majority backed the deal that Greece might just pay off the small reminder and others who held out in the hope that enough non-participants would trigger CDS.
I have previously said that it would be positive if the situation did lead to a credit event being declared on CDS as it would give some legitimacy to the sovereign CDS product. If it didn't trigger following a 70% write down and a €100bn total write off then you have to question your usage of the product. However the more I think about it the more I think that any future such European debt restructuring would have to be viewed on its own merit from a CDS standpoint and we cannot assume that just because CDS has been triggered for Greece that it would necessarily trigger for someone else in the future. After all, if the EU had wanted to ensure that CDS did not trigger that could have organized that by just giving Greece a bit more leeway re its targets or a bit more cash. So it is good news in the short term, but longer term maybe not of much significance.I have previously said that it would be positive if the situation did lead to a credit event being declared on CDS as it would give some legitimacy to the sovereign CDS product. If it didn't trigger following a 70% write down and a €100bn total write off then you have to question your usage of the product. However the more I think about it the more I think that any future such European debt restructuring would have to be viewed on its own merit from a CDS standpoint and we cannot assume that just because CDS has been triggered for Greece that it would necessarily trigger for someone else in the future. After all, if the EU had wanted to ensure that CDS did not trigger that could have organized that by just giving Greece a bit more leeway re its targets or a bit more cash. So it is good news in the short term, but longer term maybe not of much significance.
7.50am: It's a quiet start for the week in the diary. The eurogroup meeting, which begins in Brussels shortly before European stock markets close, is the main event - will they give final approval to Greece's aid package? Otherwise, economic data from Italy this morning will show how badly the country shrank in the last quarter. Here is today's agenda:7.50am: It's a quiet start for the week in the diary. The eurogroup meeting, which begins in Brussels shortly before European stock markets close, is the main event - will they give final approval to Greece's aid package? Otherwise, economic data from Italy this morning will show how badly the country shrank in the last quarter. Here is today's agenda:
• Updated Italian fourth-quarter GDP data - 9am GMT
• Greek debt swap (locally-issued bonds) completed
• Eurogroup meeting begins in Brussels - from 4pm GMT		• Updated Italian fourth-quarter GDP data - 9am GMT
• Greek debt swap (locally-issued bonds) completed
• Eurogroup meeting begins in Brussels - from 4pm GMT
7.20am: Good morning and welcome back to our rolling coverage of the eurozone debt crisis and world economy. The new Greek bonds handed to creditors start trading today after Friday's debt swap. They have been changing hands at steep discounts to their face value in the grey market, with a yield of 18%. The International Swaps and Derivatives Association's ruling that the bond deal represents a credit event that will trigger the payout of insurance protection on Greek bonds came late on Friday, so European markets haven't had time to react yet.7.20am: Good morning and welcome back to our rolling coverage of the eurozone debt crisis and world economy. The new Greek bonds handed to creditors start trading today after Friday's debt swap. They have been changing hands at steep discounts to their face value in the grey market, with a yield of 18%. The International Swaps and Derivatives Association's ruling that the bond deal represents a credit event that will trigger the payout of insurance protection on Greek bonds came late on Friday, so European markets haven't had time to react yet.
In Brussels, eurozone finance ministers are expected to finally sign off on the €130bn aid for Greece - its second bailout package. But despite French president Nicolas Sarkozy's assertion at the weekend that the Greece crisis has been resolved, it is widely thought that the country will eventually need a third bailout. Economic data showed on Friday that the economy shrank even more than first thought in the fourth quarter of last year, by 7.5%.In Brussels, eurozone finance ministers are expected to finally sign off on the €130bn aid for Greece - its second bailout package. But despite French president Nicolas Sarkozy's assertion at the weekend that the Greece crisis has been resolved, it is widely thought that the country will eventually need a third bailout. Economic data showed on Friday that the economy shrank even more than first thought in the fourth quarter of last year, by 7.5%.
Michael Hewson, senior market analyst at CMC Markets UK, said:Michael Hewson, senior market analyst at CMC Markets UK, said:
Greece's decision to invoke collective action clauses to bring the debt swap deal up to 95.7% participation saw ISDA bow to the inevitable on Friday and invoke a credit event and in turn signal the triggering of Greek CDS insurance.Greece's decision to invoke collective action clauses to bring the debt swap deal up to 95.7% participation saw ISDA bow to the inevitable on Friday and invoke a credit event and in turn signal the triggering of Greek CDS insurance.
There still remains some uncertainty as to the effect such an action will have on European banks even allowing for a net payout of around $3.2bn, but in truth ISDA had little choice given the effect ruling against a default would have had on European bond markets.There still remains some uncertainty as to the effect such an action will have on European banks even allowing for a net payout of around $3.2bn, but in truth ISDA had little choice given the effect ruling against a default would have had on European bond markets.
As it is the wriggling by ISDA in recent days over the triggering of the insurance has already created uncertainty as to the worth of such insurance going forward and as such could well make future European bond issuance fraught with difficulty in the future.As it is the wriggling by ISDA in recent days over the triggering of the insurance has already created uncertainty as to the worth of such insurance going forward and as such could well make future European bond issuance fraught with difficulty in the future.

Gary Jenkins of Swordfish Research said:
Gary Jenkins of Swordfish Research said:
Greece has received the blessing (and soon the money) of the EU and for the time being at least a disaster scenario has been avoided, although as I said the other day Greece only gets its debt/GDP [ratio] to 120% by 2020 if everything goes perfectly which is the most unlikely outcome. So whilst writing off over €100bn of debt can only help Greece it is probably not enough to get its debt back onto a sustainable path and thus what the EU is really doing is buying time for the other troubled European sovereigns to get their houses in order.Greece has received the blessing (and soon the money) of the EU and for the time being at least a disaster scenario has been avoided, although as I said the other day Greece only gets its debt/GDP [ratio] to 120% by 2020 if everything goes perfectly which is the most unlikely outcome. So whilst writing off over €100bn of debt can only help Greece it is probably not enough to get its debt back onto a sustainable path and thus what the EU is really doing is buying time for the other troubled European sovereigns to get their houses in order.