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Eurozone crisis live: Bundesbank chief criticises firewall plans Eurozone crisis live: Bundesbank chief criticises firewall plans
(40 minutes later)
3.43pm: The German government is keen to introduce legislation on the new fiscal discipline pact for the European Union by the summer, despite opposition parties calling for a delay.
The pact would impose strict rules across 25 EU countries, but Reuters reports the social democrats and greens want to add growth boosting policies to help the eurozone strugglers. They want any parliamentary vote delayed until September - when the French are expected to endorse the pact depending on the outcome of April's election. But Angela Merkel's centre-right coalition wants ratification in June, at the same time as the new European Stabililty Mechanism.
Before all that of course, we have the key decision on the total size of the bailout fund - the ESM combined with the current European Financial Stability Facility.
3.02pm: Wall Street is off to an uncertain start, with the Dow Jones Industrial Average down around 6 points in early trading.3.02pm: Wall Street is off to an uncertain start, with the Dow Jones Industrial Average down around 6 points in early trading.
US durable goods orders - that is, long lasting factory goods such as cars and fridges - rose less than expected in February, which has taken the shine off things. They climbed 2.2% compared to a 3.6% fall in January and below a 3% rise forecast by economists. Aircraft orders rose sharply, with Boeing reporting 237 orders in February, up from 150 in January.US durable goods orders - that is, long lasting factory goods such as cars and fridges - rose less than expected in February, which has taken the shine off things. They climbed 2.2% compared to a 3.6% fall in January and below a 3% rise forecast by economists. Aircraft orders rose sharply, with Boeing reporting 237 orders in February, up from 150 in January.
The slightly disappointing figure suggests the improvement in the US economy is a halting one at best, hence the market's lack of enthusiasm. The FTSE 100 is currently 18 points lower while the French and German indices are off nearly 0.5%.The slightly disappointing figure suggests the improvement in the US economy is a halting one at best, hence the market's lack of enthusiasm. The FTSE 100 is currently 18 points lower while the French and German indices are off nearly 0.5%.
2.26pm: With Wall Street about to open, I'm going to hand this over to my colleague Nick Fletcher. Cheers all....2.26pm: With Wall Street about to open, I'm going to hand this over to my colleague Nick Fletcher. Cheers all....
1.49pm: The head of the Bundesbank, Jens Weidmann, has criticised Europe's efforts to build a new firewall to contain the eurozone crisis.1.49pm: The head of the Bundesbank, Jens Weidmann, has criticised Europe's efforts to build a new firewall to contain the eurozone crisis.
Speaking in London, Weidmann said that a larger rescue fund would not solve Europe's problems, and might even make the crisis worse. Weidmann told an audience at Chatham House that:Speaking in London, Weidmann said that a larger rescue fund would not solve Europe's problems, and might even make the crisis worse. Weidmann told an audience at Chatham House that:
Just like the 'Tower of Babel,' the 'Wall of Money' will never reach heaven.Just like the 'Tower of Babel,' the 'Wall of Money' will never reach heaven.
If we continue to make it higher and higher, we will, in fact, run into more worldly constraints.If we continue to make it higher and higher, we will, in fact, run into more worldly constraints.
Weidmann's position is rather at odds with the views of other leaders, such as Mario Monti, who argue that the larger the rescue fund, the smaller the chance you'll have to use it. That argument has failed to convince many in Germany - who would have to provide more funding than any other country.Weidmann's position is rather at odds with the views of other leaders, such as Mario Monti, who argue that the larger the rescue fund, the smaller the chance you'll have to use it. That argument has failed to convince many in Germany - who would have to provide more funding than any other country.
And, of course, the whole issues of the firewall (will it be €740bn, €1trn?....) should be resolved by the end of the week.And, of course, the whole issues of the firewall (will it be €740bn, €1trn?....) should be resolved by the end of the week.
Weidmann also dismissed warnings that austerity cuts are counterproductive, and will drive weaker members of the eurozone deep into recession. Instead, Germany's top central banker insisted that countries with large current account deficits and excessive public debt must bring in structural reforms and cut spending.Weidmann also dismissed warnings that austerity cuts are counterproductive, and will drive weaker members of the eurozone deep into recession. Instead, Germany's top central banker insisted that countries with large current account deficits and excessive public debt must bring in structural reforms and cut spending.
He claimed that the dangers of austerity were "being exaggerated," adding:He claimed that the dangers of austerity were "being exaggerated," adding:
in any case, there is little alternative.in any case, there is little alternative.
1.13pm: Spanish automobile workers in Guernica, in the Basque region of Spain, downed tools today ahead of the general strike that will grip the country tomorrow.1.13pm: Spanish automobile workers in Guernica, in the Basque region of Spain, downed tools today ahead of the general strike that will grip the country tomorrow.
Employees at a factory operated by Rinder are holding a one-day strike in protest at plans to shut the factory by the end of 2012 and outsource the work overseas. They are also angry about Spain's new labour reforms, whcih they say will make it cheaper to lay them off.Employees at a factory operated by Rinder are holding a one-day strike in protest at plans to shut the factory by the end of 2012 and outsource the work overseas. They are also angry about Spain's new labour reforms, whcih they say will make it cheaper to lay them off.
The banner reads: "Don't Close Rinder"The banner reads: "Don't Close Rinder"
1.00pm: Just in, German inflation fell in March to 2.3% (on an annual, harmonised basis), down from 2.5% in February.1.00pm: Just in, German inflation fell in March to 2.3% (on an annual, harmonised basis), down from 2.5% in February.
12.10pm: Missed this earlier -- but still worth flagging up. Greece's quiet bank run continued last month, with private sector deposits in Greek banks declining by 2.7%, following a 3% drop in January.12.10pm: Missed this earlier -- but still worth flagging up. Greece's quiet bank run continued last month, with private sector deposits in Greek banks declining by 2.7%, following a 3% drop in January.
Tha takes the total value of private deposits in Greek banks down to €170.1bn, the lowest in over five years and 30% below their peak of December 2009.Tha takes the total value of private deposits in Greek banks down to €170.1bn, the lowest in over five years and 30% below their peak of December 2009.
The steady decline in deposite is partly due to worried citizens removing their savings in case the Greek banking sector should collapse, or even leaving the country altogether. But it also reflects that fact that people have been using their savings to keep afloat, following rising unemployment and wage cuts.The steady decline in deposite is partly due to worried citizens removing their savings in case the Greek banking sector should collapse, or even leaving the country altogether. But it also reflects that fact that people have been using their savings to keep afloat, following rising unemployment and wage cuts.
11.45am: In Brussels, EU officials have denied claims that Spain may have to seek financial help.11.45am: In Brussels, EU officials have denied claims that Spain may have to seek financial help.
European Commission spokesman Amadeu Altafaj has just told a press conference that media reports that Spain may seek bailout aid are "completely without foundation".European Commission spokesman Amadeu Altafaj has just told a press conference that media reports that Spain may seek bailout aid are "completely without foundation".
Altafaj added that the private sector should be able meet most of the cost of recapitalising Spain's banks. As we flagged up at 9.23am, analysts fear that the Spanish government will be unable to pick up the bill.Altafaj added that the private sector should be able meet most of the cost of recapitalising Spain's banks. As we flagged up at 9.23am, analysts fear that the Spanish government will be unable to pick up the bill.
For background, there were reports in a number of Spanish newspapers yesterday that the EU was putting pressure on the Madrid government to accept aid. These claims were rebutted by commissioner Olli Rehn last night.For background, there were reports in a number of Spanish newspapers yesterday that the EU was putting pressure on the Madrid government to accept aid. These claims were rebutted by commissioner Olli Rehn last night.
11.22am: Moving to the Greek countryside from the city, though (see last post) is no picnic.11.22am: Moving to the Greek countryside from the city, though (see last post) is no picnic.
This picture shows 56-year-old farmer George Andrianakis, and goat, at his farm in the village of Stafania in the Peloponesse area of Greece. As he told Reuters, profits at the farm (which includes orange and olive trees, sheep and goats) are down by over 50% this year while costs are almost 30% higher.This picture shows 56-year-old farmer George Andrianakis, and goat, at his farm in the village of Stafania in the Peloponesse area of Greece. As he told Reuters, profits at the farm (which includes orange and olive trees, sheep and goats) are down by over 50% this year while costs are almost 30% higher.
11.11am: News in from Athens, where our correspondent Helena Smith says newspapers and television channels this morning all reporting that young Greeks hit hard by the financial crisis are fleeing from the cities to the countryside.11.11am: News in from Athens, where our correspondent Helena Smith says newspapers and television channels this morning all reporting that young Greeks hit hard by the financial crisis are fleeing from the cities to the countryside.
Some commentators are describing it as a mass exodus. Helena writes:
Some commentators are describing it as a mass exodus. Helena writes:
It's official: Greece is undergoing a mass internal migration as a result of the economic crisis that has engulfed the nation since December 2009.It's official: Greece is undergoing a mass internal migration as a result of the economic crisis that has engulfed the nation since December 2009.
After years of being spurned for the bright lights of big cities, rural areas are making a comeback as unprecedented numbers of unemployed young Greeks move en masse to the countryside encouraged by government stipends to cultivate tracts of land that have been left untended for years. A survey conducted at the behest of the Agricultural Development Ministry by the polling firm Kapa Research found that more than 1.5 million Greeks were considering relocating to rural areas with one in five already having made the move. Around 75 % were under the age of 44 – the group worst hit by joblessness in a nation where more are now out of work than employed.After years of being spurned for the bright lights of big cities, rural areas are making a comeback as unprecedented numbers of unemployed young Greeks move en masse to the countryside encouraged by government stipends to cultivate tracts of land that have been left untended for years. A survey conducted at the behest of the Agricultural Development Ministry by the polling firm Kapa Research found that more than 1.5 million Greeks were considering relocating to rural areas with one in five already having made the move. Around 75 % were under the age of 44 – the group worst hit by joblessness in a nation where more are now out of work than employed.
A €60bn state-funded program offering plots of land at cheap rates to would-be farmers had been snapped up, said the agriculture minister Costas Skandalides, announcing the findings. The survey showed that the vast majority were willing to earn less for a better quality of life. "More than one million Greeks, most with university and even post graduate degrees, are rejecting prototypes to go back to their roots convinced that it will lead to a better quality of life even if there are less trappings," he averred. "We are witnessing a profound shift in Greek society and lifestyles the extent to which we have yet to grasp."A €60bn state-funded program offering plots of land at cheap rates to would-be farmers had been snapped up, said the agriculture minister Costas Skandalides, announcing the findings. The survey showed that the vast majority were willing to earn less for a better quality of life. "More than one million Greeks, most with university and even post graduate degrees, are rejecting prototypes to go back to their roots convinced that it will lead to a better quality of life even if there are less trappings," he averred. "We are witnessing a profound shift in Greek society and lifestyles the extent to which we have yet to grasp."
In the northern Greek city of Thessaloniki, more than 4,000 trained agronomists have rushed to sign up to an initiate that has seen the town's main university rent out plots of land for cultivation at affordable prices. "I will go and grow rice and cotton," Alexandra Terzidou, one of the graduates, told Skai news. "It's a great opportunity."In the northern Greek city of Thessaloniki, more than 4,000 trained agronomists have rushed to sign up to an initiate that has seen the town's main university rent out plots of land for cultivation at affordable prices. "I will go and grow rice and cotton," Alexandra Terzidou, one of the graduates, told Skai news. "It's a great opportunity."
Prior to the research academics had poured over anecdotal evidence of the migration but had been unable to pin point just how big it was.Prior to the research academics had poured over anecdotal evidence of the migration but had been unable to pin point just how big it was.
11.03am: Ireland's economy continues to be buffeted by the government's austerity programme. Data just released showed that retail sales fell by 0.3% month-on-month in February, and are 1.9% lower than a year ago.11.03am: Ireland's economy continues to be buffeted by the government's austerity programme. Data just released showed that retail sales fell by 0.3% month-on-month in February, and are 1.9% lower than a year ago.
UPDATE: Conall Mac Coille, chief economist at Dublin stock broking firm Davy, says that the decline is partly due to a recent rise in VAT, which had already sent retail sales tumbling by 4.1% in January compared with December.UPDATE: Conall Mac Coille, chief economist at Dublin stock broking firm Davy, says that the decline is partly due to a recent rise in VAT, which had already sent retail sales tumbling by 4.1% in January compared with December.
10.54am: Back to the eurozone crisis! Where Italy has conducted another successful bond auction.10.54am: Back to the eurozone crisis! Where Italy has conducted another successful bond auction.
The Italian treasury sold six-month bonds at an average yield of just 1.119%, which is the lowest borrowing cost since September 2010.The Italian treasury sold six-month bonds at an average yield of just 1.119%, which is the lowest borrowing cost since September 2010.
10.45am: My colleague Katie Allen has written a full story about the UK GDP data here....10.45am: My colleague Katie Allen has written a full story about the UK GDP data here....
10.34am: Ed Balls, shadow chancellor, says this morning's GDP data is "very worrying news", and shows that the UK economy has effectively flatlined since the government's spending review of October 2010.10.34am: Ed Balls, shadow chancellor, says this morning's GDP data is "very worrying news", and shows that the UK economy has effectively flatlined since the government's spending review of October 2010.
Balls said:Balls said:
At the start of 2012 our economy should be doing more than just recovering the lost output at the end of last year. Months and years of flatlining or slow growth will make it harder to get the deficit down and cause long-term damage to our economy.At the start of 2012 our economy should be doing more than just recovering the lost output at the end of last year. Months and years of flatlining or slow growth will make it harder to get the deficit down and cause long-term damage to our economy.
There have to be tough decisions on tax, spending and pay, but raising taxes and cutting spending too far and too fast has backfired. We need a real plan for jobs and growth, like Labour's five point plan, to get our economy moving again and get Britain back to work. That is how we will get our deficit down in a fairer, better way.There have to be tough decisions on tax, spending and pay, but raising taxes and cutting spending too far and too fast has backfired. We need a real plan for jobs and growth, like Labour's five point plan, to get our economy moving again and get Britain back to work. That is how we will get our deficit down in a fairer, better way.
10.16am: This graph shows how UK GDP fell sharply, then rose again, and then dipped back, since the financial crisis began:10.16am: This graph shows how UK GDP fell sharply, then rose again, and then dipped back, since the financial crisis began:
The lighter blue bars show the first estimate of GDP, typically issued less than a month after the quarter has ended. The final revision (such as today's data) includes more information and is thus more accurate.The lighter blue bars show the first estimate of GDP, typically issued less than a month after the quarter has ended. The final revision (such as today's data) includes more information and is thus more accurate.
9.54am: Here's some early reaction to this morning's GDP data from City analysts:9.54am: Here's some early reaction to this morning's GDP data from City analysts:
Jonathan Portes, director of the National Institute of Economic and Social Research (NIESR):Jonathan Portes, director of the National Institute of Economic and Social Research (NIESR):
We knew the last three months of last year were pretty bad, and today's figures show they were slightly worse than we thought.We knew the last three months of last year were pretty bad, and today's figures show they were slightly worse than we thought.
There has clearly been some pick-up in the early months of this year...but it does emphasise what a bad year 2011 was for the UK economy.There has clearly been some pick-up in the early months of this year...but it does emphasise what a bad year 2011 was for the UK economy.
Vicky Redwood of Capital EconomicsVicky Redwood of Capital Economics
The slight downward revision to GDP in Q4 is disappointing, although of course this is fairly old news now and it looks as though the economy recovered somewhat in the first quarter.The slight downward revision to GDP in Q4 is disappointing, although of course this is fairly old news now and it looks as though the economy recovered somewhat in the first quarter.
Jeremy Cook, chief economist at World First foreign exchangeJeremy Cook, chief economist at World First foreign exchange
Growth has been revised lower on services numbers and this means that we must be slightly more circumspect when looking at Q1, given increases in energy prices and the likely dampening effect that this will have on household spending.

Even though this figure has been revised lower, we do however believe that we can now attribute this to being a slight blip. Business surveys such as the recent Purchasing Manager surveys have shown that Q1 should be growing at around a 0.3/0.4% pace, although we would like to see more in the form of business investment, which fell in Q4 by 3.3%. Hopefully the recent Budget will give that a prod in the right direction.

The UK growth profile looks to continue to "bump along the bottom" in 2012 with no single quarter expected by us to print over 0.5%.		Growth has been revised lower on services numbers and this means that we must be slightly more circumspect when looking at Q1, given increases in energy prices and the likely dampening effect that this will have on household spending.

Even though this figure has been revised lower, we do however believe that we can now attribute this to being a slight blip. Business surveys such as the recent Purchasing Manager surveys have shown that Q1 should be growing at around a 0.3/0.4% pace, although we would like to see more in the form of business investment, which fell in Q4 by 3.3%. Hopefully the recent Budget will give that a prod in the right direction.

The UK growth profile looks to continue to "bump along the bottom" in 2012 with no single quarter expected by us to print over 0.5%.
9.48am: Here's the details of this morning's UK GDP data for the final three months of 2011.9.48am: Here's the details of this morning's UK GDP data for the final three months of 2011.
Services sector output: fell by 0.1% quarter-on-quarter,
Industrial production: fell by 1.3% q/q (inc. a 0.7% drop in manufacturing output)
Construction industry: fell by 0.2% q/q		Services sector output: fell by 0.1% quarter-on-quarter,
Industrial production: fell by 1.3% q/q (inc. a 0.7% drop in manufacturing output)
Construction industry: fell by 0.2% q/q
Consumer spending rose by 0.4% q/q
Exports grew by 1.6% q/q
Households' real disposable income fell 0.2% q/q.		Consumer spending rose by 0.4% q/q
Exports grew by 1.6% q/q
Households' real disposable income fell 0.2% q/q.
This all added up to a 0.3% decline in overall GDP.This all added up to a 0.3% decline in overall GDP.
9.42am: The most startling fact in this morning's UK GDP data is that household disposable income fell by 1.2% during 2011.9.42am: The most startling fact in this morning's UK GDP data is that household disposable income fell by 1.2% during 2011.
According to the Office for National Statistics, that's the biggest annual decline since 1977.According to the Office for National Statistics, that's the biggest annual decline since 1977.
With the UK economy managing only meagre growth through the last year (GDP grow by just 0.7% during the 12 months), it underlines the weak position of the UK, even though it is likely to dodge a double-dip recession.With the UK economy managing only meagre growth through the last year (GDP grow by just 0.7% during the 12 months), it underlines the weak position of the UK, even though it is likely to dodge a double-dip recession.
9.38am: The pound has fallen almost half a cent against the US dollar following the news that the UK econony contracted by 0.3% in the last quarter. It just hit a low of $1.5904.9.38am: The pound has fallen almost half a cent against the US dollar following the news that the UK econony contracted by 0.3% in the last quarter. It just hit a low of $1.5904.
Sterling also hit a two-week low against the euro, to €1.191. That means one euro is worth 83.96p.Sterling also hit a two-week low against the euro, to €1.191. That means one euro is worth 83.96p.
9.30am: Breaking news -- the UK economy shrank by 0.3% in the last three months of 2011, not 0.2% as previously estimated.9.30am: Breaking news -- the UK economy shrank by 0.3% in the last three months of 2011, not 0.2% as previously estimated.
Announcing the downward revision, the Office for National Statistics said that transport, communication, business services and financial sectors all performed worse than originally thought.Announcing the downward revision, the Office for National Statistics said that transport, communication, business services and financial sectors all performed worse than originally thought.
9.23am: Right on cue, Citigroup has undermined Monti's claim that worst of the eurozone crisis is behind us, by predicting that Spain may need international help by the end of 2012.9.23am: Right on cue, Citigroup has undermined Monti's claim that worst of the eurozone crisis is behind us, by predicting that Spain may need international help by the end of 2012.
In a research note published this morning, Citi warned that Spain could only avoid a bailout through "more radical measures" than are currently on the table. It warned that the Spanish government may lack the financial resources to recapitalise its banks.In a research note published this morning, Citi warned that Spain could only avoid a bailout through "more radical measures" than are currently on the table. It warned that the Spanish government may lack the financial resources to recapitalise its banks.
Spain's banks reportedly hold €2.4 trillion of debts on their books, leaving them extremely exposed to losses following the collapse of the country's property sector in recent years.Spain's banks reportedly hold €2.4 trillion of debts on their books, leaving them extremely exposed to losses following the collapse of the country's property sector in recent years.
9.05am: Italian business confidence figures released in the last few minutes show that firms across Italy are slightly more optimistic about the future.9.05am: Italian business confidence figures released in the last few minutes show that firms across Italy are slightly more optimistic about the future.
ISTAT's business morale index inched up to 92.1 in March, up from February's two-year low of 91.7. Encouraging, but still a rather low figure that doesn't really back up Mario Monti's claim that the crisis is 'almost over'....ISTAT's business morale index inched up to 92.1 in March, up from February's two-year low of 91.7. Encouraging, but still a rather low figure that doesn't really back up Mario Monti's claim that the crisis is 'almost over'....
8.55am: EU president Herman Van Rompuy ‏has announced over Twitter that Europe will take a final decision on the size of its firewall by the end of this week:8.55am: EU president Herman Van Rompuy ‏has announced over Twitter that Europe will take a final decision on the size of its firewall by the end of this week:
A decision on the adequacy of the #EFSF / #ESM firewall will be taken by the end of the week. #seoulA decision on the adequacy of the #EFSF / #ESM firewall will be taken by the end of the week. #seoul
— Herman Van Rompuy (@euHvR) March 28, 2012— Herman Van Rompuy (@euHvR) March 28, 2012
The firewall is the top item for discussion at the meeting of eurozone finance ministers, which begin on Friday.The firewall is the top item for discussion at the meeting of eurozone finance ministers, which begin on Friday.
8.48am: Just breaking on the news wires -- Dutch finance minister Jan Kees de Jager has declined to comment on rumours that he threatend to resign if his government failed to cut its budget deficit to 3% of GDP in 2013 (as demanded under the new Fiscal Pact).8.48am: Just breaking on the news wires -- Dutch finance minister Jan Kees de Jager has declined to comment on rumours that he threatend to resign if his government failed to cut its budget deficit to 3% of GDP in 2013 (as demanded under the new Fiscal Pact).
Developing.... Developing....
8.31am: Mario Monti's claim that the euro crisis is almost over (see 8.17am) has been swiftly challenged in the City.8.31am: Mario Monti's claim that the euro crisis is almost over (see 8.17am) has been swiftly challenged in the City.
Elisabeth Afseth of Investec pointed out that Italian bond yields hit their highest level of the month yesterday, with the 10-year ending 9 basis points higher at 5.11%. It's risen a little higher this morning, too.Elisabeth Afseth of Investec pointed out that Italian bond yields hit their highest level of the month yesterday, with the 10-year ending 9 basis points higher at 5.11%. It's risen a little higher this morning, too.
Afseth added that speculation that Portugal will need a second package of financial help will intensify through 2012, despite German finance minister Wolfgang Schäuble stating yesterday that no further bailouts would be needed within the next three months. She said:Afseth added that speculation that Portugal will need a second package of financial help will intensify through 2012, despite German finance minister Wolfgang Schäuble stating yesterday that no further bailouts would be needed within the next three months. She said:
Schäuble is most likely to be right in his prediction of no bailout in next 3 months, but that doesn't give me much confidence that the crisis is over.Schäuble is most likely to be right in his prediction of no bailout in next 3 months, but that doesn't give me much confidence that the crisis is over.
Chris Adams, the Financial Times's Markets Editor, said he was concerned that Monti's comments suggest EU leaders have become dangerously relaxed.Chris Adams, the Financial Times's Markets Editor, said he was concerned that Monti's comments suggest EU leaders have become dangerously relaxed.
A dollop of soothing balm from the ECB and Italy's Monti declares eurozone crisis "almost over". All I see is rising danger of complacency.A dollop of soothing balm from the ECB and Italy's Monti declares eurozone crisis "almost over". All I see is rising danger of complacency.
— Chris Adams (@ChrisAdamsMKTS) March 28, 2012— Chris Adams (@ChrisAdamsMKTS) March 28, 2012
That 'soothing balm' was the European Central Bank's offer of around €1 trillion in cheap loans, the 'Long Term Refinancing Operation'. LTRO, though, can only offer temporary relief to the eurozone. And indeed, there are fears that the ECB has simply stored up more problems for the future (by encouraging banks to take on too much risky sovereign debt, for example).That 'soothing balm' was the European Central Bank's offer of around €1 trillion in cheap loans, the 'Long Term Refinancing Operation'. LTRO, though, can only offer temporary relief to the eurozone. And indeed, there are fears that the ECB has simply stored up more problems for the future (by encouraging banks to take on too much risky sovereign debt, for example).
8.17am: Mario Monti struck an upbeat tone in Japan today, telling an audience in Tokyo that:8.17am: Mario Monti struck an upbeat tone in Japan today, telling an audience in Tokyo that:
The euro zone has gone through a huge crisis.The euro zone has gone through a huge crisis.
I believe that this crisis is now almost over.I believe that this crisis is now almost over.
Monti cited the agreement of Greece's second aid package, the austerity budget being drawn up in Spain, and his own work in Italy since taking power in November.Monti cited the agreement of Greece's second aid package, the austerity budget being drawn up in Spain, and his own work in Italy since taking power in November.
Interestingly, Monti also pointed the finger of blame at Berlin and Paris for helping to create the crisis. He said Germany and France's failure to stick to the original fiscal rules had set a dangerously bad example to other countries.Interestingly, Monti also pointed the finger of blame at Berlin and Paris for helping to create the crisis. He said Germany and France's failure to stick to the original fiscal rules had set a dangerously bad example to other countries.
AFP has the quotes from Monti:AFP has the quotes from Monti:
The story goes back to 2003 (and) the still almost infant life of the euro...It was in fact Germany and France that were loose concerning the public deficits and debts.The story goes back to 2003 (and) the still almost infant life of the euro...It was in fact Germany and France that were loose concerning the public deficits and debts.
As readers may remember, neither country faced any sanctions for breaking the terms of the original Stability and Growth Pact (which said countries should not run deficits above 3%). And thus, the seeds for future excess deficits were sowed. As Monti put it:As readers may remember, neither country faced any sanctions for breaking the terms of the original Stability and Growth Pact (which said countries should not run deficits above 3%). And thus, the seeds for future excess deficits were sowed. As Monti put it:
Of course if the father and mother of the eurozone are violating the rules, you could not expect .. (countries such as) Greece to be compliant.Of course if the father and mother of the eurozone are violating the rules, you could not expect .. (countries such as) Greece to be compliant.
8.09am: We've already had one piece of economic data this morning -- Paris's national statistics office has confirmed that the French economy grew by 0.2% in the final three months of 2011.8.09am: We've already had one piece of economic data this morning -- Paris's national statistics office has confirmed that the French economy grew by 0.2% in the final three months of 2011.
That means that France defied the wider economic gloom in Europe. The eurozone economy shrank by 0.3% during that quarter, with even Germany contracting (by 0.2%).That means that France defied the wider economic gloom in Europe. The eurozone economy shrank by 0.3% during that quarter, with even Germany contracting (by 0.2%).
8.07am: Here's today's agenda.8.07am: Here's today's agenda.
The most significant economic data today may be the latest German inflation figures. Economists expect a small fall, to 2.3% this month from 2.5% in February *on a harmonised basis* . The UK GDP data will also be closely watched in the City.The most significant economic data today may be the latest German inflation figures. Economists expect a small fall, to 2.3% this month from 2.5% in February *on a harmonised basis* . The UK GDP data will also be closely watched in the City.
• Mario Monti in Japan - all day
• Italian Business Confidence for March: 9am BST / 10am CET
• UK GDP for Q4 2011 (final reading): 9.30am BST
• German consumer prices index for March: 1pm BST / 2pm CET
• US durable goods orders for February - 1.30 BST / 8.30am EST		• Mario Monti in Japan - all day
• Italian Business Confidence for March: 9am BST / 10am CET
• UK GDP for Q4 2011 (final reading): 9.30am BST
• German consumer prices index for March: 1pm BST / 2pm CET
• US durable goods orders for February - 1.30 BST / 8.30am EST
In the bond markets, the Italian government is looking to sell €8.5bn of six-month bills.In the bond markets, the Italian government is looking to sell €8.5bn of six-month bills.
8.00am: Good morning all, and welcome to our rolling coverage of the eurozone crisis …8.00am: Good morning all, and welcome to our rolling coverage of the eurozone crisis …
… a crisis that has almost run its course, according to a decidedly upbeat Mario Monti. Earlier this morning, the Italian prime minister told an audience in Tokyo that the eurozone's worst problems were now behind it.… a crisis that has almost run its course, according to a decidedly upbeat Mario Monti. Earlier this morning, the Italian prime minister told an audience in Tokyo that the eurozone's worst problems were now behind it.
According to local reports, Monti also pinned some of the blame for the euro's woes on Germany and France – we'll have full details shortly.According to local reports, Monti also pinned some of the blame for the euro's woes on Germany and France – we'll have full details shortly.
Monti's comments come just hours after the OECD warned that Europe needs "the mother of all firewalls" to contain the debt crisis.Monti's comments come just hours after the OECD warned that Europe needs "the mother of all firewalls" to contain the debt crisis.
Elsewhere, Spain remains under the cosh as its government pushes on with a tough austerity budget, due on Friday.Elsewhere, Spain remains under the cosh as its government pushes on with a tough austerity budget, due on Friday.
And in the UK, final GDP data will show whether the economy did shrink by 0.2% in the last three months of 2011.And in the UK, final GDP data will show whether the economy did shrink by 0.2% in the last three months of 2011.