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| Eurozone crisis live: Spain now in the spotlight | Eurozone crisis live: Spain now in the spotlight |
| (40 minutes later) | |
| 10.27am: Helen Smith reports from Athens that the troika have returned to Greece with the aim of ensuring austerity measures are implemented no matter what the outcome of the forthcoming general election. She writes: | |
| A technical team from the EU, ECB and IMF begins arriving in Athens today to ensure that whatever government emerges the measures are in place to enact €11.6 billion in spending cuts between 2013 and 2014 to meet fiscal targets. The newly installed finance minister, Filippos Sachinidis, has until this Friday to list state expenditure in all domains so that both sides can choose where to start cutting. Economic stability in Greece will depend to great degree in the coming months on political developments, analysts say. The big question is when the national poll will take place. Well briefed sources said today that "it was most probable" the election will happen on May 6th, and not April 29th, simply because there was not enough time to enact the laws necessary to secure the second, €130bn rescue package of aid from the European Union and International Monetary Fund. "All the laws have to be passed before parliament is dissolved and everyone is coming round to the opinion that there is simply not enough time to do this," said one insider. "May 6th is now the most probable date and not April 29." A raft of opinion surveys over the weekend reinforced what everyone fears: that Greece is heading for a hung parliament with no single party winning enough votes to form a government. | |
| 10.19am: News in from Athens where our correspondent Helena Smith says officials, awaiting the return of international monitors, are heaving a sigh of relief that anti-austerity protestors failed to mar the country's independence day celebrations over the weekend. Helena writes: | |
| A massive security operation that it has emerged cost close to €1.5 million ensured that Greece was able to mark its 191st year of freedom from Ottoman rule without incident – at least in Athens – over the weekend. With Prime minister Lucas Papademos eager that parades be violence free, some 7000 police, including 40 units of riot police, were seconded to the capital for the event. "The measures taken were close to extreme," a senior official admitted this morning. "And because of that nothing really happened in Athens." In other cities, violence did break out as Greeks enraged by spending cuts and tax increases scuffled with police and threw yoghurt, eggs and coffee at politicians. In Heraklion, the capital of Crete, clashes between hundreds of protestors and riot police ensured that the parade never took place. Similar clashes also broke out in the western port city of Patras and in Thessaloniki, the country's northern capital, where dozens of anti-austerity protestors were also arrested. | |
| 10.09am: Russia is planning to issue dollar Eurobonds for the first time in two years, Reuters is reporting. The bonds will be issued in 5, 10 and 30 year tranches, according to Reuters sources. Russian central bank and finance ministry officials are in London on a last leg of a Eurobond roadshow which ends of Tuesday, with pricing expected mid-week. Russia hopes to raise $7 billion abroad in 2012. The country last issued a dollar Eurobond in April 2010, raising $5.5bn. | |
| 9.53am: South Korea's $320 billion pension fund is to set up a London base in a move that could boost investment in British infrastructure. The South Korean National Pension Service, which has already invested more than £1bn in the UK with stakes in Gatwick Airpor and HSBC's Canary Wharf headquarters, said Monday it would open its second foreign base after New York in the British capital. The news was announced by deputy prime minister Nick Clegg, who is visiting Seoul. The UK ratified a free trade agreement between the EU and South Korea on Sunday, saying it could add £500m a year to the UK economy and create £2bn of additional export opportunities. | 9.53am: South Korea's $320 billion pension fund is to set up a London base in a move that could boost investment in British infrastructure. The South Korean National Pension Service, which has already invested more than £1bn in the UK with stakes in Gatwick Airpor and HSBC's Canary Wharf headquarters, said Monday it would open its second foreign base after New York in the British capital. The news was announced by deputy prime minister Nick Clegg, who is visiting Seoul. The UK ratified a free trade agreement between the EU and South Korea on Sunday, saying it could add £500m a year to the UK economy and create £2bn of additional export opportunities. |
| 9.28am: Italian consumers have a spring in their step, with national statistics bureau ISTAT saying confidence is at its highest since July. The consumer confidence index published Monday rose to 96.8 in March, up from 94.4 in February, beating the average forecast in a Reuters survey which had showed a slight decline to 93.7. With the yield on 10 year bonds at under 5% and concern about a default abating, sentiment appears to be improving. | 9.28am: Italian consumers have a spring in their step, with national statistics bureau ISTAT saying confidence is at its highest since July. The consumer confidence index published Monday rose to 96.8 in March, up from 94.4 in February, beating the average forecast in a Reuters survey which had showed a slight decline to 93.7. With the yield on 10 year bonds at under 5% and concern about a default abating, sentiment appears to be improving. |
| 9.06am: German business sentiment has risen for the fifth month in a row, according to data just published by the Ifo institute in Munich. The Ifo business climate index rose to 109.8 in March, from a revised 109.7 in February. The uplift was a welcome surprise, as a Reuters poll of 51 economists had forecast March would be flat at 109.6. Nonetheless the German CAC headed into negative territory, down 0.41%, and the French DAX index of leading stocks fell 0.28%. Economist Carsten Brzeski at ING Bank comments: | 9.06am: German business sentiment has risen for the fifth month in a row, according to data just published by the Ifo institute in Munich. The Ifo business climate index rose to 109.8 in March, from a revised 109.7 in February. The uplift was a welcome surprise, as a Reuters poll of 51 economists had forecast March would be flat at 109.6. Nonetheless the German CAC headed into negative territory, down 0.41%, and the French DAX index of leading stocks fell 0.28%. Economist Carsten Brzeski at ING Bank comments: |
| Today's Ifo index illustrates once again the sound economic fundamentals. The strong labour market, filled order books and low inventories still bode well for growth in the coming months, albeit at a low level. Even at a slower pace, the German economy should remain the Eurozone growth show case of this year. It might not be Champions League quality anymore, but with today's Ifo index it should probably be enough to win the Europa League. | Today's Ifo index illustrates once again the sound economic fundamentals. The strong labour market, filled order books and low inventories still bode well for growth in the coming months, albeit at a low level. Even at a slower pace, the German economy should remain the Eurozone growth show case of this year. It might not be Champions League quality anymore, but with today's Ifo index it should probably be enough to win the Europa League. |
| 8.56am: Olli Rehn, the European Union's economic chief, has called on the Spanish government to hold fast in pushing through austerity measures, blaming the recent sharp rise in Madrid borrowing costs on a view that spain was seeking to wriggle out of spending cuts. Rehn, the EU commissioner for economic and monetary affairs, told reporters on Saturday at an informal a gathering of European leaders in Finland: | 8.56am: Olli Rehn, the European Union's economic chief, has called on the Spanish government to hold fast in pushing through austerity measures, blaming the recent sharp rise in Madrid borrowing costs on a view that spain was seeking to wriggle out of spending cuts. Rehn, the EU commissioner for economic and monetary affairs, told reporters on Saturday at an informal a gathering of European leaders in Finland: |
| Because there was a perception Spain was relaxing its fiscal targets for this year, there has been already a market reaction of several dozen basis points on yields of Spanish bonds...That shows how fragile the situation still is. To return to sustainable growth, it is a necessary condition to ensure sustainability in public finances. | Because there was a perception Spain was relaxing its fiscal targets for this year, there has been already a market reaction of several dozen basis points on yields of Spanish bonds...That shows how fragile the situation still is. To return to sustainable growth, it is a necessary condition to ensure sustainability in public finances. |
| Spain's minister for European affairs, Inigo Mendez de Vigo, said Spain would not back away: | Spain's minister for European affairs, Inigo Mendez de Vigo, said Spain would not back away: |
| We're going to do it. We're on teh way and we're serious. We're going to give our word. | We're going to do it. We're on teh way and we're serious. We're going to give our word. |
| 8.31am: German Chancellor Angela Merkel has told the BBC that it would be "catastrophic" if Greece or any other euro country were to leave the currency union. Following the €130bn (£110bn) rescue package recently agreed in order to keep Greece solvent until 2014, Merkel said the eurozone would be "incredibly weakend" by a Greek exit. In an interview to be broadcast on Newsnight on Monday, she said: | 8.31am: German Chancellor Angela Merkel has told the BBC that it would be "catastrophic" if Greece or any other euro country were to leave the currency union. Following the €130bn (£110bn) rescue package recently agreed in order to keep Greece solvent until 2014, Merkel said the eurozone would be "incredibly weakend" by a Greek exit. In an interview to be broadcast on Newsnight on Monday, she said: |
| People all over the world would ask: 'Who will be next?'...We have taken the decision to be in a currency union. This is not only a monetary decision, it is a political one. It would be catastrophic if we were to say to one of those who have decided to be with us: 'We no longer want you' | People all over the world would ask: 'Who will be next?'...We have taken the decision to be in a currency union. This is not only a monetary decision, it is a political one. It would be catastrophic if we were to say to one of those who have decided to be with us: 'We no longer want you' |
| Merkel backed UK chancellor George Osborne's austerity drive, saying the country "was right" to cut public spending. | Merkel backed UK chancellor George Osborne's austerity drive, saying the country "was right" to cut public spending. |
| It is something that each country in Europe can do because we will all learn that no country can live beyond its means | It is something that each country in Europe can do because we will all learn that no country can live beyond its means |
| 8.25am: European markets are rallying this morning after last week's falls. | 8.25am: European markets are rallying this morning after last week's falls. |
| The FTSE 100 is up with a 0.21% rise The French CAC is trading 0.43% higher The German CAC is up 0.37% | The FTSE 100 is up with a 0.21% rise The French CAC is trading 0.43% higher The German CAC is up 0.37% |
| 8.16am: Here's today's agenda: | 8.16am: Here's today's agenda: |
| • German business climate indicator: the IFO publishes data for March 9.30am • Office of Budget Responsibility: The OBR will give evidence to the Treasury committee's 2012 Budget inquiry at 3.30p • Mario Draghi to speak: the European Central Bank president will address a German banking event 4pm | • German business climate indicator: the IFO publishes data for March 9.30am • Office of Budget Responsibility: The OBR will give evidence to the Treasury committee's 2012 Budget inquiry at 3.30p • Mario Draghi to speak: the European Central Bank president will address a German banking event 4pm |
| 7.45am: Good morning and welcome to the eurozone crisis live blog. | 7.45am: Good morning and welcome to the eurozone crisis live blog. |
| The pain in Spain will move centre stage this week, with prime minister Mariano Rajoy due to announce €40bn of spending cuts in a budget on Friday. | The pain in Spain will move centre stage this week, with prime minister Mariano Rajoy due to announce €40bn of spending cuts in a budget on Friday. |
| This will follow a general strike planned for Thursday, the first in Spain since September 2010, as public sector workers demonstrate against austerity and unemployment. | This will follow a general strike planned for Thursday, the first in Spain since September 2010, as public sector workers demonstrate against austerity and unemployment. |
| As my colleague Giles Tremlett in Madrid writes in today's Guardian: | As my colleague Giles Tremlett in Madrid writes in today's Guardian: |
| European leaders and bond markets, which now consider Spain a worse risk thatn Italy, are beginning to see the country as the biggest single threat to teh eurozone. | European leaders and bond markets, which now consider Spain a worse risk thatn Italy, are beginning to see the country as the biggest single threat to teh eurozone. |
| Rajoy, just three months in office, failed to lead his conservative Peoples Party to a decisive victory in souther Andalucia and norther Asturias in regional elections on Sunday, as worries loom over Spain's regional governments' ability to control their deficits. | Rajoy, just three months in office, failed to lead his conservative Peoples Party to a decisive victory in souther Andalucia and norther Asturias in regional elections on Sunday, as worries loom over Spain's regional governments' ability to control their deficits. |
| After a quiet spell following the Greek debt settlement, negative economic data from France and Germany last week saw equity markets suffer their worst five days of 2012. | After a quiet spell following the Greek debt settlement, negative economic data from France and Germany last week saw equity markets suffer their worst five days of 2012. |
| Eurogroup finance ministers meet in Copenhagen on Friday and Saturday, with Germany expected to drop its opposition to combining the remainder of the EFSF (European Financial Stability Fund) with the European Stability Mechanism to create a €740bn pot. | Eurogroup finance ministers meet in Copenhagen on Friday and Saturday, with Germany expected to drop its opposition to combining the remainder of the EFSF (European Financial Stability Fund) with the European Stability Mechanism to create a €740bn pot. |
| Today's German IFO data for March will set the tone after last week's worrying PMI numbers. | Today's German IFO data for March will set the tone after last week's worrying PMI numbers. |