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Eurozone debt crisis: Markets slide again as tensions remain high in Greece Eurozone debt crisis: Euro falls as tensions remain high in Greece
(about 1 hour later)
4.05pm: It's that time again. Bill Gross of Pimco, the bond trading giant, has banged out another tweet about the eurozone crisis, comparing the situation in Spain to a 'tumor' that can't be addressed by simply cutting government spending. Classy stuff:
Gross: #Greece was a zit, #Portugal is a boil, #Spain is a tumor. You can't fix a debt crisis w/ austerity & more debt.
— PIMCO (@PIMCO) April 5, 2012
The analogy hasn't been well-received, with City experts suggesting that the Pimco boss is playing up to his name:
That's a Gross analogy in more ways than one #Portugal #Spain #Greece
— Michael Hewson (@michaelhewson) April 5, 2012
3.58pm: Another Spain development -- the International Monetary Fund has warned that it faces "severe" challenges.
IMF spokesman Gerry Rice told reporters in Madrid that the Fund is still assessing the new Spanish budget. Crucially, the IMF is determined to ensure that Spain's regions (who failed to get anywhere close to their fiscal targets in 2011) do better this year. Rice said:

We will point to the need to ensure compliance with the new target, not just
at the central level also at the regional government level.
Clearly the challenges Spain is facing are severe (and) market sentiment remains volatile.
Hard to believe that Mario Monti was claiming the other week that the eurozone crisis was almost over.
3.39pm: Spain's 10-year bond yields hit a high of 5.85% today, a level not seen since December 12 2011 (before the European Central Bank made its first offer of cheap loans to the banking sector).
We're almost at the level where the ECB might start intervening in the bond market.
Raj Badiani, analyst at IHS Global Insight, said the rising bond yields reflect fears that Spain is heading into a deep recession. While the country is in no immediate jeopardy, the crunch could come next year:
The risks are expected to intensify in 2013, with Spain battered by a crippling combination of a lingering economic downturn, challenging financing requirements, a labour market close to meltdown, and a banking sector struggling to contain ever-increasing troubled real-estate assets (loans and repossessed assets).
Indeed, the continued tensions in the banking sector, resulting from the deteriorating quality of its real-estate assets and domestic government debt holdings, could prompt the need for additional capital injections from the state or external interventions.
2.42pm: In New York the Dow opened down 0.4% at 13203 points, after signs the US jobs market (see 1.53pm) is improving reinforced the belief there would be no more quantitative easing in the near future.2.42pm: In New York the Dow opened down 0.4% at 13203 points, after signs the US jobs market (see 1.53pm) is improving reinforced the belief there would be no more quantitative easing in the near future.
This follows Wednesday's drop of nearly 1%, after the Federal Reserve's policy-making committee appeared to rule out a third bout of quantitative easing, the programme of bond purchases by the central bank that has twice before boosted the American money supply (my colleague Jo Moulds writes)This follows Wednesday's drop of nearly 1%, after the Federal Reserve's policy-making committee appeared to rule out a third bout of quantitative easing, the programme of bond purchases by the central bank that has twice before boosted the American money supply (my colleague Jo Moulds writes)
1.53pm: America's economic recovery continues -- the number of people signing up for jobless benefits last week dropped to its lowest level in nearly four years.1.53pm: America's economic recovery continues -- the number of people signing up for jobless benefits last week dropped to its lowest level in nearly four years.
Initial jobless claims came in at 357,00 for the last week, a 6,000 drop on the previous seven days. It's not as large a drop as some economists had expected, but suggests that the US labour market is still moving in the right direction.Initial jobless claims came in at 357,00 for the last week, a 6,000 drop on the previous seven days. It's not as large a drop as some economists had expected, but suggests that the US labour market is still moving in the right direction.
12.53pm: More news from Athens from Helena Smith – senior government officials say Greece will "almost certainly" be going to elections on Sunday May 6th.12.53pm: More news from Athens from Helena Smith – senior government officials say Greece will "almost certainly" be going to elections on Sunday May 6th.
One well-briefed insider just told Helena:One well-briefed insider just told Helena:
We're at the point where it just has to be announced, which will happen next week. All this other talk [about a delay in the poll taking place] are stupidities.We're at the point where it just has to be announced, which will happen next week. All this other talk [about a delay in the poll taking place] are stupidities.
Parliament will close next Tuesday, the insider added.Parliament will close next Tuesday, the insider added.
As if on cue, Antonis Samaras, the conservative New Democracy leader, will formally kick off his election camapign tomorrow with interviews on local TV channels before he takes to the campaign trail over the weekend (following this morning's comment piece)

Helena also reports that interim prime minister Lucas Papademos has flown to Cyprus today where he will shortly hold talks with president Demetris Christofias. The discussions will focus on how the two economically fragile countries can best harvest their new found energy sources - natural gas deposits deep in the Mediterranean Sea.		As if on cue, Antonis Samaras, the conservative New Democracy leader, will formally kick off his election camapign tomorrow with interviews on local TV channels before he takes to the campaign trail over the weekend (following this morning's comment piece)

Helena also reports that interim prime minister Lucas Papademos has flown to Cyprus today where he will shortly hold talks with president Demetris Christofias. The discussions will focus on how the two economically fragile countries can best harvest their new found energy sources - natural gas deposits deep in the Mediterranean Sea.
12.21pm: Antonis Samaras, the leader of Greece's New Democracy party, has claimed today that Greece could make a "spectacular comeback" from its current woes.12.21pm: Antonis Samaras, the leader of Greece's New Democracy party, has claimed today that Greece could make a "spectacular comeback" from its current woes.
Samaras made the claim in an article published this morning, as the upcoming Greek general election moves closer. In it, Samaras renewed his call for Europe to grant Greece fresh measures to assist recovery and promote sustainable growth, rather than simply pile on more austerity.Samaras made the claim in an article published this morning, as the upcoming Greek general election moves closer. In it, Samaras renewed his call for Europe to grant Greece fresh measures to assist recovery and promote sustainable growth, rather than simply pile on more austerity.
As he put it:As he put it:
In the past two years the employment costs of the Greek private sector have decreased by more than 15% while the tax burden has increased by 50%, energy costs have increased by 450%, and there is no more liquidity in the market. Even if you could make people work for free, nobody would hire them in such an environment.In the past two years the employment costs of the Greek private sector have decreased by more than 15% while the tax burden has increased by 50%, energy costs have increased by 450%, and there is no more liquidity in the market. Even if you could make people work for free, nobody would hire them in such an environment.
We need to allow for a recovery to jump-start the Greek economyWe need to allow for a recovery to jump-start the Greek economy
Helena Smith, our Athens correspondent, explains that the centre-right New Democracy party is keen to send out a positive message ahead of forthcoming general election, adding:Helena Smith, our Athens correspondent, explains that the centre-right New Democracy party is keen to send out a positive message ahead of forthcoming general election, adding:
The government went out of its way yesterday to insist the election will not be postponed as some leaders in Greece's increasingly diverse array of political parties would like. In the count-down to the poll, widely expected to take place on May 6th, New Democracy is suddenly feelling the pinch. After months of seeing its popularity soar on the back of its "anti-memorandum" stance [for which read fierce opposition to the terms and conditions applied to Athens receiving EU-IMF aid] the party's ratings have taken a knock as right-wing populists, refusing to endorse its new "pro-memorandum" stance have broken away and formed a new party, Independent Greeks.The government went out of its way yesterday to insist the election will not be postponed as some leaders in Greece's increasingly diverse array of political parties would like. In the count-down to the poll, widely expected to take place on May 6th, New Democracy is suddenly feelling the pinch. After months of seeing its popularity soar on the back of its "anti-memorandum" stance [for which read fierce opposition to the terms and conditions applied to Athens receiving EU-IMF aid] the party's ratings have taken a knock as right-wing populists, refusing to endorse its new "pro-memorandum" stance have broken away and formed a new party, Independent Greeks.
The ascent of its major rival, the centre left Pasok, under its new leader former finance minister Evangelos Venizelos has also taken the wind out of its sails. Samaras, and his advisers, are now keen to show that they are the only party that can lead Greece out of its economic mess and that from the go-get they got it right by persistently arguing that the "growth through austerity" policies enforced at the request of the country's foreign lenders [EU/ECB and IMF] were going nowhere.
The ascent of its major rival, the centre left Pasok, under its new leader former finance minister Evangelos Venizelos has also taken the wind out of its sails. Samaras, and his advisers, are now keen to show that they are the only party that can lead Greece out of its economic mess and that from the go-get they got it right by persistently arguing that the "growth through austerity" policies enforced at the request of the country's foreign lenders [EU/ECB and IMF] were going nowhere.
12.01pm: No surprises from the Bank of England – it has held UK interest rates at the current record low 0.5%, and made no change to its quantitative easing programme (currently worth £325bn).12.01pm: No surprises from the Bank of England – it has held UK interest rates at the current record low 0.5%, and made no change to its quantitative easing programme (currently worth £325bn).
11.33am: Here's some more video from Athens last night....11.33am: Here's some more video from Athens last night....
......
11.05am: Some background on why the swiss franc/euro cap which shattered this morning (see last post) is important.11.05am: Some background on why the swiss franc/euro cap which shattered this morning (see last post) is important.
The swiss franc appreciated in value through 2011, as the eurozone crisis encouraged investors to seek 'safe havens' for their money. By last autumn, the swiss franc was approaching parity with the euro, raising fears that its strength would harm the Swiss economy (making its exports too pricey, and deterring tourists). So, last September, the Swiss National Bank announced that it would not tolerate a swiss franc stronger than 1.20 against the euro -- an effective devaluation of around 9%.The swiss franc appreciated in value through 2011, as the eurozone crisis encouraged investors to seek 'safe havens' for their money. By last autumn, the swiss franc was approaching parity with the euro, raising fears that its strength would harm the Swiss economy (making its exports too pricey, and deterring tourists). So, last September, the Swiss National Bank announced that it would not tolerate a swiss franc stronger than 1.20 against the euro -- an effective devaluation of around 9%.
Until today, that peg had held (it takes a brave currency trader to go up against a national bank). So why did it *briefly* wobble today? It could be caused by thin pre-holiday trading (with many traders away for Easter).Until today, that peg had held (it takes a brave currency trader to go up against a national bank). So why did it *briefly* wobble today? It could be caused by thin pre-holiday trading (with many traders away for Easter).
One fund manager, @Pawelmorski, blamed it on "technical sloppiness" on the SNB's part, and doesn't see large-scale buying of the Swiss franc. This isn't a repeat of George Soros's attack on the pound in 1992.One fund manager, @Pawelmorski, blamed it on "technical sloppiness" on the SNB's part, and doesn't see large-scale buying of the Swiss franc. This isn't a repeat of George Soros's attack on the pound in 1992.
Economist Shaun Richards commented:Economist Shaun Richards commented:
I suspect the Swiss National Bank may be considering the wisdom of promising to intervene in "unlimited amounts". So we return once more to two themes. Central bank intervention and the (un)wisdom of bombast and hyperbole.I suspect the Swiss National Bank may be considering the wisdom of promising to intervene in "unlimited amounts". So we return once more to two themes. Central bank intervention and the (un)wisdom of bombast and hyperbole.
Also it looks perhaps that money is fleeing the Euro…..To which the obvious question is why today and are the upcoming bank holidays significant?Also it looks perhaps that money is fleeing the Euro…..To which the obvious question is why today and are the upcoming bank holidays significant?
And Jeremy Cook of World First said the move was "a massive euro negative in the short term".And Jeremy Cook of World First said the move was "a massive euro negative in the short term".
10.52am: This is worrying -- the Swiss franc just broke through the 1.20 mark against the euro for the first time since the Swiss National Bank drew its line in the sand.10.52am: This is worrying -- the Swiss franc just broke through the 1.20 mark against the euro for the first time since the Swiss National Bank drew its line in the sand.
Currency traders have pushed the Swiss franc to a high of 1.1998 versus the euro in the last few minutes, despite the SNB's vow to use 'unlimited' resources to prevent the Swiss currency becoming too strong.Currency traders have pushed the Swiss franc to a high of 1.1998 versus the euro in the last few minutes, despite the SNB's vow to use 'unlimited' resources to prevent the Swiss currency becoming too strong.
It's another sign of growing concern over the eurozone crisis.....It's another sign of growing concern over the eurozone crisis.....
A Swiss National Bank spokesman has hit the wires saying that the SNB remains committed to buying foreign currencies in 'unlimited quantities' to defend its cap.A Swiss National Bank spokesman has hit the wires saying that the SNB remains committed to buying foreign currencies in 'unlimited quantities' to defend its cap.
UPDATE: The Swiss franc has weakened below the 1.2 mark against the euro -- suggesting the SNB has been in action.UPDATE: The Swiss franc has weakened below the 1.2 mark against the euro -- suggesting the SNB has been in action.
Here's the Swiss National Bank defending their currency's "floor" of 1.20 against the euro twitter.com/EdConwaySky/st…Here's the Swiss National Bank defending their currency's "floor" of 1.20 against the euro twitter.com/EdConwaySky/st…
— Ed Conway (@EdConwaySky) April 5, 2012— Ed Conway (@EdConwaySky) April 5, 2012
10.31am: The London stock market has turned negative following this morning's poor industrial production data. The FTSE 100 is now down 25 points at 5673, and other European markets are also in the red.10.31am: The London stock market has turned negative following this morning's poor industrial production data. The FTSE 100 is now down 25 points at 5673, and other European markets are also in the red.
In the reader comments, Halo572 asks:In the reader comments, Halo572 asks:
how far down will the City Boys drive the FTSE in their tantrum to force Lord Sir Mervyn to print them some more free money?how far down will the City Boys drive the FTSE in their tantrum to force Lord Sir Mervyn to print them some more free money?
We know that two members of the Bank of England's monetary policy committee voted for another bout of quantitative easing last month, so just three more need to change their mind. I bet it won't happen at today's meeting, and I suspect that weak economic data - rather than a stock market rout - would force their hand (but one would trigger the other....). Still, some economists do suspect that the Bank will soon need to print even more electronic money.We know that two members of the Bank of England's monetary policy committee voted for another bout of quantitative easing last month, so just three more need to change their mind. I bet it won't happen at today's meeting, and I suspect that weak economic data - rather than a stock market rout - would force their hand (but one would trigger the other....). Still, some economists do suspect that the Bank will soon need to print even more electronic money.
10.10am: In Greece, people are gathering in Syntagma Square again this morning.10.10am: In Greece, people are gathering in Syntagma Square again this morning.
This picture was taken by photo journalist and political communications expert Mehran Khalili. It shows that the tree close to the spot where yesterday's suicide took place remains a focal point.This picture was taken by photo journalist and political communications expert Mehran Khalili. It shows that the tree close to the spot where yesterday's suicide took place remains a focal point.
Helena Smith, our correspondent in Athens, confirms that last night's vigil was largely peaceful, before violence flared after dark. She writes:Helena Smith, our correspondent in Athens, confirms that last night's vigil was largely peaceful, before violence flared after dark. She writes:
For many nationwide the retired pensioner, named as Dimitris Christoulas by the Greek media, has become a symbol of resistance to what are widely perceived to be unfair and ultimately self-defeating austerity measures.For many nationwide the retired pensioner, named as Dimitris Christoulas by the Greek media, has become a symbol of resistance to what are widely perceived to be unfair and ultimately self-defeating austerity measures.
The vast majority of the messages pinned to the tree, under which the 77-year-old shot himself Wednesday morning, speak of rage and helplessness. "A message of despair with a public suicide," railed the mass-selling Ta Nea from its front page.The vast majority of the messages pinned to the tree, under which the 77-year-old shot himself Wednesday morning, speak of rage and helplessness. "A message of despair with a public suicide," railed the mass-selling Ta Nea from its front page.
9.55am: Spanish sovereign debt has fallen in value again this morning, pushing up the yield (the measure of the interest rate) on its 10-year bonds to 5.75% this morning.9.55am: Spanish sovereign debt has fallen in value again this morning, pushing up the yield (the measure of the interest rate) on its 10-year bonds to 5.75% this morning.
That's a new 12-week high, and a sigh that bond traders are wary that Spain can hit its fiscal targets.That's a new 12-week high, and a sigh that bond traders are wary that Spain can hit its fiscal targets.
Yesterday, the Spanish finance minister admitted that the main risk for the Spanish economy is the idea that its public accounts are "not sustainable". Gary Jenkins, analyst at Swordfish Research, agrees, saying:Yesterday, the Spanish finance minister admitted that the main risk for the Spanish economy is the idea that its public accounts are "not sustainable". Gary Jenkins, analyst at Swordfish Research, agrees, saying:
Bond investors are unlikely to give Spain the benefit of the doubt and any further deviation from this year's budget deficit target will only make them question the 2013 target and indeed Spain's debt sustainability path even more.Bond investors are unlikely to give Spain the benefit of the doubt and any further deviation from this year's budget deficit target will only make them question the 2013 target and indeed Spain's debt sustainability path even more.
9.35am: Britain's factory output suffered a surprise fall in February, data just released has shown, in a sign that the UK economy may not be as healthy as thought.9.35am: Britain's factory output suffered a surprise fall in February, data just released has shown, in a sign that the UK economy may not be as healthy as thought.
UK manufacturing output dropped by 1.0% in February, the biggest fall in almost a year. January's output was also revised down by the Office for National Statistics.UK manufacturing output dropped by 1.0% in February, the biggest fall in almost a year. January's output was also revised down by the Office for National Statistics.
The news sent the pound falling against the dollar, down 0.3 of a cent to $1.5868.The news sent the pound falling against the dollar, down 0.3 of a cent to $1.5868.
9.19am: This footage from Al Jazeera shows violent scenes from Athens last night, and the crowds of people to flocked to Syntagma Square to lay flowers and leave messages at the spot where the 77-year old man killed himself.9.19am: This footage from Al Jazeera shows violent scenes from Athens last night, and the crowds of people to flocked to Syntagma Square to lay flowers and leave messages at the spot where the 77-year old man killed himself.
8.55am: The euro just fell to a two and a half-month low against the pound.8.55am: The euro just fell to a two and a half-month low against the pound.
At 82.6p, the euro is at its lowest level against sterling since 16 January. It means one pound is worth €1.2106.At 82.6p, the euro is at its lowest level against sterling since 16 January. It means one pound is worth €1.2106.
Peter O'Flanagan, head of foreign exchange trading at Clear Currency, said that fears over the eurozone were rising again, after Spain saw its borrowing costs spike yesterday):Peter O'Flanagan, head of foreign exchange trading at Clear Currency, said that fears over the eurozone were rising again, after Spain saw its borrowing costs spike yesterday):
The primary concern now for the Eurozone will be pressure being put on peripheral yields, yesterday's weak Spanish bond auction results are a good indication of further pressureThe primary concern now for the Eurozone will be pressure being put on peripheral yields, yesterday's weak Spanish bond auction results are a good indication of further pressure
8.36am: The difficult issue of 'austerity suicides' was also raised in the Italian parliament yesterday.8.36am: The difficult issue of 'austerity suicides' was also raised in the Italian parliament yesterday.
Antonio Di Pietro, the leader of the Italy of Values (IDV) party, claimed that technocratic prime minister Mario Monti's reforms had helped to drive a businessman to kill himself.Antonio Di Pietro, the leader of the Italy of Values (IDV) party, claimed that technocratic prime minister Mario Monti's reforms had helped to drive a businessman to kill himself.
Reuters has the details this morning:Reuters has the details this morning:
The 59-year-old Rome-based construction firm owner left a note apologising to family members and explaining that his business had failed, police said.The 59-year-old Rome-based construction firm owner left a note apologising to family members and explaining that his business had failed, police said.
Di Pietro....criticised the government's reform agenda in parliament, and said Monti had the suicides of people who can't make it to the end of the month "on his conscience".Di Pietro....criticised the government's reform agenda in parliament, and said Monti had the suicides of people who can't make it to the end of the month "on his conscience".
Monti refused to comment on the claim last night.Monti refused to comment on the claim last night.
There is some evidence that the economic crisis has led to an increase in people taking their own lives. Last December, statistics released by the Greek ministry of health showed that the number of suicides in the first five months of 2011 had risen by 40%.There is some evidence that the economic crisis has led to an increase in people taking their own lives. Last December, statistics released by the Greek ministry of health showed that the number of suicides in the first five months of 2011 had risen by 40%.
8.18am: As we reported last night, Greek people took to the streets of Athens after a 77-year old man shot himself in Syntagma Square.8.18am: As we reported last night, Greek people took to the streets of Athens after a 77-year old man shot himself in Syntagma Square.
As the picture shows, the scene was initially peaceful. Many people left flowers and cards at the scene.As the picture shows, the scene was initially peaceful. Many people left flowers and cards at the scene.
But after dark fell, violence did break out -- with riot police using tear gas, and some protestors throwing petrol bombs.But after dark fell, violence did break out -- with riot police using tear gas, and some protestors throwing petrol bombs.
There's more details about the death of the unidentified man, who was described as an "upstanding and decent" father of one, here.There's more details about the death of the unidentified man, who was described as an "upstanding and decent" father of one, here.
Greek media have named him as Dimitris Christoulas, a retired pharmacist.Greek media have named him as Dimitris Christoulas, a retired pharmacist.
8.15am: All is calm in the stock markets this morning. Here's the details:8.15am: All is calm in the stock markets this morning. Here's the details:
FTSE 100: up 0.23%, or 13 points, at 5716
German DAX: up 0.4%
French CAC: up 0.5%
Spanish IBEX:
Italy's FTSE MIB: up 0.1%		FTSE 100: up 0.23%, or 13 points, at 5716
German DAX: up 0.4%
French CAC: up 0.5%
Spanish IBEX:
Italy's FTSE MIB: up 0.1%
It appears that many City workers have clocked off early for the long weekend (the London stock market will close for Good Friday tomorrow, and then not reopen until Tuesday).It appears that many City workers have clocked off early for the long weekend (the London stock market will close for Good Friday tomorrow, and then not reopen until Tuesday).
If my commute is in anyway symbolic of today's market, it is going to be a quiet day #nobodyaroundIf my commute is in anyway symbolic of today's market, it is going to be a quiet day #nobodyaround
— World First (@World_First) April 5, 2012— World First (@World_First) April 5, 2012
8.06am: With the holidays almost upon us, there's not too much on the agenda today. But the economic data should give fresh insights into the European economy (and who knows, governor Mervyn King might pull an Easter bunny out of the hat at noon (but he almost certainly won't)).8.06am: With the holidays almost upon us, there's not too much on the agenda today. But the economic data should give fresh insights into the European economy (and who knows, governor Mervyn King might pull an Easter bunny out of the hat at noon (but he almost certainly won't)).
• UK manufacturing/industrial production for February: 9.30am BST
• German industrial production: 11am BST / noon CET
• Bank of England decision: noon BST
• NIESR issues its estimate for UK GDP in Q1 2012: 3pm BST

In the bond markets, the UK and France are both selling government debt – which could be interesting following Spain's weak auction yesterday.		• UK manufacturing/industrial production for February: 9.30am BST
• German industrial production: 11am BST / noon CET
• Bank of England decision: noon BST
• NIESR issues its estimate for UK GDP in Q1 2012: 3pm BST

In the bond markets, the UK and France are both selling government debt – which could be interesting following Spain's weak auction yesterday.
8.00am: Good morning and welcome to our rolling coverage of the eurozone financial crisis.8.00am: Good morning and welcome to our rolling coverage of the eurozone financial crisis.
It's the last full trading day before the Easter break, and traders are hoping to avoid a repeat of yesterday's stock market rout. But Spain's weak debt auction continues to linger over the eurozone as we slide towards the Easter break.It's the last full trading day before the Easter break, and traders are hoping to avoid a repeat of yesterday's stock market rout. But Spain's weak debt auction continues to linger over the eurozone as we slide towards the Easter break.
In Greece, tensions are high after the suicide yesterday of a 77-year old man close to the Athens parliament. Last night's peace gathering in Syntagma Square was followed by clashes between Greek riot police and protesters.In Greece, tensions are high after the suicide yesterday of a 77-year old man close to the Athens parliament. Last night's peace gathering in Syntagma Square was followed by clashes between Greek riot police and protesters.
On the economic front, we have UK and German industrial production data to entertain us, plus the Bank of England's decision on monetary policy.On the economic front, we have UK and German industrial production data to entertain us, plus the Bank of England's decision on monetary policy.