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Version 12 Version 13
Eurozone crisis live: Deeper recession looms as service sector shrinks Eurozone crisis live: Deeper recession looms as service sector shrinks
(40 minutes later)
5.00pm: Over to Greece where our correspondent Helena Smith says as one of the crisis-hit country's shortest election campaigns begins to wind down leaders are poised to stage a batch of final rallies.

Helena writes:

All eyes will shortly be on Syntagma Square, Athens' main plaza, where Evangelos Venizelos, leader of the socialist party Pasok, will shortly deliver his last major address before the election.
With the stage set, loudspeakers out and vendors selling Pasok flags and caps for €5 a piece, the first attendees have already begun to pour into the square, the theatre, ironically, of much of Greece's anti-protest movement since the debt crisis erupted.
Venizelos, finance minister until he gave up the post to take over the helm of Pasok barely two months ago, is under no illusion that his is an uphill struggle.
No party has lost as much support as Pasok whose traditional power base of low-income workers and public sector employees has been badly hit by tax hikes, pay and pension cuts. Some 25 % of those who have not yet made up their minds as to who to vote for on Sunday cast ballots in favour of Pasok when it re-entered office with a landslide victory under former leader George Papandreou in October 2009. Even at this hour they are keen to hear what Venizelos has to say.
The politician has repeatedly warned against complacency, urging Greeks not to "waste" their votes and play with fire by supporting "anti-European," anti-bailout parties because they want to "punish" mainstream politicians widely blamed for the country's chronic financial ills. Casting "protest" votes was a very dangerous game he told the mass-selling Greek daily, Ethnos, today.
"This certainty that the next day [May 7] there will be a government of Pasok and New Democracy [which have collaborated in an interim coalition government lead by the unelected technocrat Lucas Papademos since November] has, I fear, created a very dangerous misconception because many people believe that since it is a 'given' they can harmlessly cast [protest votes]. But that is not the case. Nothing is a given."
Venizelos, perhaps the most reform-minded of all of Greece's political leaders, is deeply troubled that economic reforms Athens needs to enact to keep its finances afloat will derail if there is political instability. Stability is essential to luring the foreign investment which the recession-hit nation now so badly needs, according to its business community.
In an exclusive interview with the Guardian – the only foreign news outlet he has spoken with – earlier this week, Venizelos said the battle would be decided "in the last few days." The time has now arrived.
4.45pm: European stock markets have closed for the week, and traders' screens are covered with losses.4.45pm: European stock markets have closed for the week, and traders' screens are covered with losses.
FTSE 100: down 111 points at 5655, -1.93%
DAX: down 132 points at 6562, -1.97%
CAC: down 57 points at 3165, -1.79%		FTSE 100: down 111 points at 5655, -1.93%
DAX: down 132 points at 6562, -1.97%
CAC: down 57 points at 3165, -1.79%
For the FTSE 100, that's the biggest one day fall since 10th April and puts it at its lowest level since 13 April.For the FTSE 100, that's the biggest one day fall since 10th April and puts it at its lowest level since 13 April.
Here's some comment from Chris Beauchamp, market analyst at IG Index:
The morning's nervous atmosphere has given way to a bout of full-blown selling, as markets digest a mixed US jobs report and weigh up the possibilities that might ensue from the elections scheduled over the weekend in Europe
A downbeat atmosphere prevails as we head into the weekend. It still looks as if Francois Hollande will end up owning the keys of the Elysée Palace come Sunday night, which might make for some entertaining conferences between Paris and Berlin, but in Greece the situation is much less clear. Uncertainty could well persist further into next week about the new make-up of the government in Athens, which would raise the possibility of more losses for markets.
4.10pm: Italian news site Linkiesta is reporting that a senior official at the Greek Ministry of Finance has predicted that Greece will definitely leave the euro.4.10pm: Italian news site Linkiesta is reporting that a senior official at the Greek Ministry of Finance has predicted that Greece will definitely leave the euro.
In this interview (in Italian) the unnamed official says:In this interview (in Italian) the unnamed official says:
Whoever wins, no party shall have the honesty to comply with the Memorandum of Troika EU-ECB-IMF....unless things change, Greece has no chance to survive in the euro zone.Whoever wins, no party shall have the honesty to comply with the Memorandum of Troika EU-ECB-IMF....unless things change, Greece has no chance to survive in the euro zone.
Not quite sure what to make of this - clearly the timing is interesting, ahead of the elections. Plenty of economists, city traders, commentators, and readers, believe Greece will eventually exit. Three triggers appear likely, either
1) Greece fails to hit the financial targets agreed with the Troika, and is deprived of its bailout cash;
2) The Greek parliament cannot agree the details of future austerity cuts
3) Sunday's election delivers a very divided parliament, with strong support for anti-EU parties.		Not quite sure what to make of this - clearly the timing is interesting, ahead of the elections. Plenty of economists, city traders, commentators, and readers, believe Greece will eventually exit. Three triggers appear likely, either
1) Greece fails to hit the financial targets agreed with the Troika, and is deprived of its bailout cash;
2) The Greek parliament cannot agree the details of future austerity cuts
3) Sunday's election delivers a very divided parliament, with strong support for anti-EU parties.
Option three is a fear for many Greeks:Option three is a fear for many Greeks:
@graemewearden Indeed. The latest political snapshot shows a highly fragmented Greece; I fear we'll be picking up the pieces after 6 May.@graemewearden Indeed. The latest political snapshot shows a highly fragmented Greece; I fear we'll be picking up the pieces after 6 May.
— Finisterre67 (@Finisterre67) May 4, 2012— Finisterre67 (@Finisterre67) May 4, 2012
3.32pm: Some interesting comments from Wolfgang Schäuble, German finance minister, are just hitting the Reuters terminal now. Not clear where he's speaking.3.32pm: Some interesting comments from Wolfgang Schäuble, German finance minister, are just hitting the Reuters terminal now. Not clear where he's speaking.
Among other highlights, Schäuble has apparently declared that the results of this weekend's Greek and French elections "will not have, in essence, any impact on German financial policies".Among other highlights, Schäuble has apparently declared that the results of this weekend's Greek and French elections "will not have, in essence, any impact on German financial policies".
Schäuble also rebuffed the idea that the winner(s) of the Greek general election could seek to change the terms of its financial aid package. Greece must respect the commitments made, he said, or else "it will have to bear the consequences".Schäuble also rebuffed the idea that the winner(s) of the Greek general election could seek to change the terms of its financial aid package. Greece must respect the commitments made, he said, or else "it will have to bear the consequences".
That's a clear message to the Greek people (who may not necessarily want the advice).That's a clear message to the Greek people (who may not necessarily want the advice).
Schäuble's concludes by saying that being a member of the EU is entirely voluntary.Schäuble's concludes by saying that being a member of the EU is entirely voluntary.
3.08pm: Larry Elliott, our economics editor, says today's US jobs numbers underline the weakness of the US economic recovery (but at least it's recovering).3.08pm: Larry Elliott, our economics editor, says today's US jobs numbers underline the weakness of the US economic recovery (but at least it's recovering).
The US jobs figures were a curate's egg - good in parts.The US jobs figures were a curate's egg - good in parts.
More here.More here.
3.03pm: World stock markets are falling sharply now, following the US jobs data -- and with the uncertainty of this weekend's elections looming.3.03pm: World stock markets are falling sharply now, following the US jobs data -- and with the uncertainty of this weekend's elections looming.
The FTSE 100 is now down 102 points at 5665, a loss of 1.75%. Both the German DAX and the French CAC are off around 1.25%The FTSE 100 is now down 102 points at 5665, a loss of 1.75%. Both the German DAX and the French CAC are off around 1.25%
In America, the Dow Jones opened lower and is currently off 106 points at 13099.In America, the Dow Jones opened lower and is currently off 106 points at 13099.
The oil price has also fallen today, with a barrel of New York crude briefly falling below the $100 mark.The oil price has also fallen today, with a barrel of New York crude briefly falling below the $100 mark.
2.31pm: In Italy, the government has been swamped with around forty thousand emailed responses in a single day after asking the public to blow the whistle on wasteful state spending.2.31pm: In Italy, the government has been swamped with around forty thousand emailed responses in a single day after asking the public to blow the whistle on wasteful state spending.
Tom Kington reports from Rome:Tom Kington reports from Rome:
The scale of the immediate public response suggests Mario Monti may succeed in hunting down €4.2bn euros in savings on government spending he wants to make as Italy plunges further into recession.The scale of the immediate public response suggests Mario Monti may succeed in hunting down €4.2bn euros in savings on government spending he wants to make as Italy plunges further into recession.
Monti has also drafted in Enrico Bondi, the tough manager who turned around Parmalat, to help unearth waste. But critics smell a gimmick, wondering why Monti's government of experts is appointing another expert, and pointing out that the whistle blower hotline looks suspiciously like a bid to distract Italians from tax hikes.Monti has also drafted in Enrico Bondi, the tough manager who turned around Parmalat, to help unearth waste. But critics smell a gimmick, wondering why Monti's government of experts is appointing another expert, and pointing out that the whistle blower hotline looks suspiciously like a bid to distract Italians from tax hikes.
Monti's pending reintroduction of a much despised property tax which Silvio Berlusconi abolished in 2008 -- to the delight of Italy's huge property owning class -- comes as dozens of debt ridden entrepreneurs commit suicide and consensus grows that Monti's austerity drive has limited the possibility of growth, rather than laying the ground work for it.Monti's pending reintroduction of a much despised property tax which Silvio Berlusconi abolished in 2008 -- to the delight of Italy's huge property owning class -- comes as dozens of debt ridden entrepreneurs commit suicide and consensus grows that Monti's austerity drive has limited the possibility of growth, rather than laying the ground work for it.
Businesses being crippled by customers paying late point out that no one pays later than Italy's central and local governments which now owe the private sector about €70bn euros.Businesses being crippled by customers paying late point out that no one pays later than Italy's central and local governments which now owe the private sector about €70bn euros.
Monti's reputation as Italy's unruffled helmsman in an economic storm has also been tarnished after thousands of Italians who took redundancy packages with payments calculated to get them through to their pensions were left high and dry by his shifting of pension ages.Monti's reputation as Italy's unruffled helmsman in an economic storm has also been tarnished after thousands of Italians who took redundancy packages with payments calculated to get them through to their pensions were left high and dry by his shifting of pension ages.
But ahead of municipal elections this weekend Italy's political parties do not look set to benefit from Monti's woes as their own scandals over the handling of state funding rumble on.But ahead of municipal elections this weekend Italy's political parties do not look set to benefit from Monti's woes as their own scandals over the handling of state funding rumble on.
To cap the humiliation suffered in the scandals by the proudly anti-immigrant Northern League party, it was revealed on Friday that the son of former party leader Umberto Bossi only became a graduate thanks to a very dubious degree from a private Albanian university.To cap the humiliation suffered in the scandals by the proudly anti-immigrant Northern League party, it was revealed on Friday that the son of former party leader Umberto Bossi only became a graduate thanks to a very dubious degree from a private Albanian university.
1.57pm: Here's some early reaction to the US unemployment data:1.57pm: Here's some early reaction to the US unemployment data:
Marcus Bullus, trading director at MB CapitalMarcus Bullus, trading director at MB Capital
After a frankly horrendous week in the Eurozone, the markets were looking to the US for some comfort. They didn't get it.

An upward revision in previous months' data will be of little consolation to the markets. The hope that a resurgent US would ignite the global economy is starting to fade, and reality starting to dawn.

These numbers were well below consensus and are a real blow to hopes of an imminent recovery.		After a frankly horrendous week in the Eurozone, the markets were looking to the US for some comfort. They didn't get it.

An upward revision in previous months' data will be of little consolation to the markets. The hope that a resurgent US would ignite the global economy is starting to fade, and reality starting to dawn.

These numbers were well below consensus and are a real blow to hopes of an imminent recovery.
Joshua Raymond, market strategist at City IndexJoshua Raymond, market strategist at City Index
The weaker than expected reading is a disappointment, being the smallest rise in non farm payrolls since October last year and strengthens investor concerns that jobs growth may have topped out earlier in the year.The weaker than expected reading is a disappointment, being the smallest rise in non farm payrolls since October last year and strengthens investor concerns that jobs growth may have topped out earlier in the year.
Yet a relatively strong set of upward revisions to March's payrolls helped to ease the any overly aggresive negative market reaction, with non farm payrolls revised from 120,000 to 154,000, whilst private payrolls were revised from 121,000 to 166,000 in March. The upward revisions leave the data somewhat mixed but nevertheless disappointing.Yet a relatively strong set of upward revisions to March's payrolls helped to ease the any overly aggresive negative market reaction, with non farm payrolls revised from 120,000 to 154,000, whilst private payrolls were revised from 121,000 to 166,000 in March. The upward revisions leave the data somewhat mixed but nevertheless disappointing.
1.42pm: April's 115,000 rise in the US non-farm payroll is the smallest increase since October 2011. This sharp slowdown in the hiring rate (which is accentuated by the upward revisions to March's data), indicates the US recovery may have slowed - not great news for Barack Obama in an election year.1.42pm: April's 115,000 rise in the US non-farm payroll is the smallest increase since October 2011. This sharp slowdown in the hiring rate (which is accentuated by the upward revisions to March's data), indicates the US recovery may have slowed - not great news for Barack Obama in an election year.
There was no significant change in the number of long-term jobless, which remained around the 5.1 million mark.There was no significant change in the number of long-term jobless, which remained around the 5.1 million mark.
There was also another fall in the labor force participation rate, which dipped to 63.6%.There was also another fall in the labor force participation rate, which dipped to 63.6%.
As this graph by Reuters' Scott Barber shows, that's the lowest level in three decades - back in the Reagan era.As this graph by Reuters' Scott Barber shows, that's the lowest level in three decades - back in the Reagan era.
1.32pm: Breaking news -- America's unemployment rate has fallen to 8.1%, from 8.2% a month ago.1.32pm: Breaking news -- America's unemployment rate has fallen to 8.1%, from 8.2% a month ago.
The eagerly awaited non-farm payroll data shows that 115,000 new jobs were created in the US last month. That's well below the consensus figure of 170,000. However, March and February's data have both been revised higher, to +154,000 (from +120,000) and +259,000 (from +240,000).The eagerly awaited non-farm payroll data shows that 115,000 new jobs were created in the US last month. That's well below the consensus figure of 170,000. However, March and February's data have both been revised higher, to +154,000 (from +120,000) and +259,000 (from +240,000).
115k plus 53k of revisions puts us in line with where we thought. #notthatbad115k plus 53k of revisions puts us in line with where we thought. #notthatbad
— P M (@Pawelmorski) May 4, 2012— P M (@Pawelmorski) May 4, 2012
1.03pm: Voters in five different EU countries are heading to the polls on Sunday. As well as France and Greece, there are local elections in Italy, a ballot in the state of Schleswig-Holstein in Germany, and a general election in Serbia.1.03pm: Voters in five different EU countries are heading to the polls on Sunday. As well as France and Greece, there are local elections in Italy, a ballot in the state of Schleswig-Holstein in Germany, and a general election in Serbia.
Our European editor, Ian Traynor, explains the implications of each contest here.Our European editor, Ian Traynor, explains the implications of each contest here.
12.27pm:News in from Athens where Helena Smith, our correspondent, has the low-down on reaction to yesterday's suggestions that divided Greece could be heading to a new round of elections within the year.

Helena writes:		12.27pm:News in from Athens where Helena Smith, our correspondent, has the low-down on reaction to yesterday's suggestions that divided Greece could be heading to a new round of elections within the year.

Helena writes:
Officials in Athens' interim government have debunked the notion that Greece is necessarily headed to a new round of elections – even if the prospect of a massive anti-austerity protest vote has drastically reduced the possibility of any party winning an overhaul majority in the 300-seat parliament. One senior official in the left-right coalition administration said the conservative New Democracy party was deliberately spreading the rumour in the hope of swinging undecided voters on the eve of the poll. An unprecedented 30% of Greece's near 5 million-strong electorate has indicated it has yet to decide which way to vote. As much as 60% has suggested it will back parties virulently opposed to stringent belt-tightening being demanded of Greece in return for rescue loans from the EU and IMF.Officials in Athens' interim government have debunked the notion that Greece is necessarily headed to a new round of elections – even if the prospect of a massive anti-austerity protest vote has drastically reduced the possibility of any party winning an overhaul majority in the 300-seat parliament. One senior official in the left-right coalition administration said the conservative New Democracy party was deliberately spreading the rumour in the hope of swinging undecided voters on the eve of the poll. An unprecedented 30% of Greece's near 5 million-strong electorate has indicated it has yet to decide which way to vote. As much as 60% has suggested it will back parties virulently opposed to stringent belt-tightening being demanded of Greece in return for rescue loans from the EU and IMF.
"What is the rationale of holding new elections if they are close to 150 seats?" the insider asked. "The fact of the matter is that they [New Democracy] will come under enormous pressure to form a government [from within Greece and the EU].""What is the rationale of holding new elections if they are close to 150 seats?" the insider asked. "The fact of the matter is that they [New Democracy] will come under enormous pressure to form a government [from within Greece and the EU]."
Sunday's vote is costing the debt-stricken country €25m. But Helena's contact denies that Athens simply can't afford to keep holding elections:Sunday's vote is costing the debt-stricken country €25m. But Helena's contact denies that Athens simply can't afford to keep holding elections:
"All the polls," he said, referring to those being conducted, privately, given the official ban on surveys 15 days before elections, "have shown that voters don't want another round [of elections].""All the polls," he said, referring to those being conducted, privately, given the official ban on surveys 15 days before elections, "have shown that voters don't want another round [of elections]."
High-ranking cadres in the socialist Pasok party, busily preparing for tonight's send-off demonstration in Syntagma square, brushed off the suggestion as absurd. The EU hadn't wanted the election in the first place. "Our partners aren't going to wait for us to make up our minds forever. There are time-tables to be kept, work to do, reforms to be passed" said one.

Even officials in New Democracy appeared to backtrack this morning. True, Chyrsanthos Lazarides, a senior aide to conservative leader Antonis Samaras, had raised the possibility on on TV but he had done so "within the framework of a much wider discussion" said the party's press office. "It was said very clearly, within the framework of a much larger discussion, that if the case arises of having a government for only three to five months [because it is so weak] then perhaps it is preferable that we have a repeat elections," said the official.

Latest polls reportedly show the centre-right New Democrats capturing between 28 to 30%. Support for Pasok is anywhere between 17 and 24 %. Although voters appear to be rallying around the two main parties in rural areas, where their traditional support base remains strongest, garnering enough votes to win a majority is very much touch and go. New Democracy would need to secure another 5% to win a majority.		High-ranking cadres in the socialist Pasok party, busily preparing for tonight's send-off demonstration in Syntagma square, brushed off the suggestion as absurd. The EU hadn't wanted the election in the first place. "Our partners aren't going to wait for us to make up our minds forever. There are time-tables to be kept, work to do, reforms to be passed" said one.

Even officials in New Democracy appeared to backtrack this morning. True, Chyrsanthos Lazarides, a senior aide to conservative leader Antonis Samaras, had raised the possibility on on TV but he had done so "within the framework of a much wider discussion" said the party's press office. "It was said very clearly, within the framework of a much larger discussion, that if the case arises of having a government for only three to five months [because it is so weak] then perhaps it is preferable that we have a repeat elections," said the official.

Latest polls reportedly show the centre-right New Democrats capturing between 28 to 30%. Support for Pasok is anywhere between 17 and 24 %. Although voters appear to be rallying around the two main parties in rural areas, where their traditional support base remains strongest, garnering enough votes to win a majority is very much touch and go. New Democracy would need to secure another 5% to win a majority.
"But," said another official, "parties that don't manage to cross the 3% threshold will not be counted [in the entire vote] which obviously will raise [the front-runner's] percentage.'"But," said another official, "parties that don't manage to cross the 3% threshold will not be counted [in the entire vote] which obviously will raise [the front-runner's] percentage.'
A good point that I neglected to mention in Thursday's Q&A with readers.A good point that I neglected to mention in Thursday's Q&A with readers.
"A lot of us are worried but we've also become philosophical," said the government insider. "Even Syriza [the populist left group whose popularity rates have risen radically in recent days] is toning down its anti-European, anti-memorandum rhetoric. No party is going to risk not having the money to pay civil servants' wages and pensions. Whatever party, or parties, are in government will make the necessary moves to keep the [rescue] funds coming.""A lot of us are worried but we've also become philosophical," said the government insider. "Even Syriza [the populist left group whose popularity rates have risen radically in recent days] is toning down its anti-European, anti-memorandum rhetoric. No party is going to risk not having the money to pay civil servants' wages and pensions. Whatever party, or parties, are in government will make the necessary moves to keep the [rescue] funds coming."
11.41am: Now here's a thing - Peter Mandelson is arguing today that Britain should still consider joining the euro in the future.11.41am: Now here's a thing - Peter Mandelson is arguing today that Britain should still consider joining the euro in the future.
Mandelson has responded to a poll which found that 80% of British people believe the UK should never join the single currency, ever, even if this damages the country's position within Europe. The former cabinet minister and European commissioner reckons such thinking is misplaced. He argues that eurozone leaders could achieve the fiscal and political integration needed to hold the single currency together. Eventually, other EU nations would also join, so Britain's choice would either be to follow suit, or choose to leave the EU.Mandelson has responded to a poll which found that 80% of British people believe the UK should never join the single currency, ever, even if this damages the country's position within Europe. The former cabinet minister and European commissioner reckons such thinking is misplaced. He argues that eurozone leaders could achieve the fiscal and political integration needed to hold the single currency together. Eventually, other EU nations would also join, so Britain's choice would either be to follow suit, or choose to leave the EU.
Dismissing the 'fantasy world' where Britain gets to remain in the EU on its terms, Mandelson writes:Dismissing the 'fantasy world' where Britain gets to remain in the EU on its terms, Mandelson writes:
I believe that the facts of life for Britain in a globalised economy are European. I believe it is not just our biggest market, but also our intellectual and political hinterland. It is our only prospect of sustained global influence in a world of continental-sized powers. The majority of British people who cannot imagine a future for Britain outside the EU need to think and debate about what this may mean.I believe that the facts of life for Britain in a globalised economy are European. I believe it is not just our biggest market, but also our intellectual and political hinterland. It is our only prospect of sustained global influence in a world of continental-sized powers. The majority of British people who cannot imagine a future for Britain outside the EU need to think and debate about what this may mean.
Hmmm. Surely the eurozone crisis means the British people are even less likely to vote to ditch the pound? It's never exactly been a popular idea, even before the public have been given an education on how single currencies operate. And yesterday's local elections have seen the eurosceptic UK Independence party achieve its best results ever, polling 13% of the vote.Hmmm. Surely the eurozone crisis means the British people are even less likely to vote to ditch the pound? It's never exactly been a popular idea, even before the public have been given an education on how single currencies operate. And yesterday's local elections have seen the eurosceptic UK Independence party achieve its best results ever, polling 13% of the vote.
Mandelson clearly has a plan. As reported last night, later today he will call for Britain to commit to a future referendum on its EU membership. Patrick Wintour reports:Mandelson clearly has a plan. As reported last night, later today he will call for Britain to commit to a future referendum on its EU membership. Patrick Wintour reports:
In a speech in Oxford on Friday, the former European commissioner will stress that a referendum on Britain's continued membership should occur only after closer fiscal union – a "eurozone mark two" – has settled, although he admits this is a way off.In a speech in Oxford on Friday, the former European commissioner will stress that a referendum on Britain's continued membership should occur only after closer fiscal union – a "eurozone mark two" – has settled, although he admits this is a way off.
11.28am: The President of the Athens Chamber of Commerce has called for Greece's next government to attempt to renegotiate its bailout package after Sunday's election.11.28am: The President of the Athens Chamber of Commerce has called for Greece's next government to attempt to renegotiate its bailout package after Sunday's election.
Costas Michalos said Athens should tell its international partners that the programme of cuts, austerity and reform needs to be changed.Costas Michalos said Athens should tell its international partners that the programme of cuts, austerity and reform needs to be changed.
CNBC has the story:
CNBC has the story:
"We need a government that is representative of at least 50 percent of the Greek electorate, even the smaller parties need consensus. We should renegotiate parts of the [bailout] package as we need to increase revenue and growth," said Costas Michalos, President of the Athens Chamber of Commerce.
...
The socialist PASOK and the New Democracy parties have both supported the bailout deal and its stringent conditions. The smaller parties are hoping to ride on the back of a wave of discontent that has swept the country in recent months, with some asking for a renegotiation of the terms of the bailout and some even calling for an exit from the euro itself.		"We need a government that is representative of at least 50 percent of the Greek electorate, even the smaller parties need consensus. We should renegotiate parts of the [bailout] package as we need to increase revenue and growth," said Costas Michalos, President of the Athens Chamber of Commerce.
...
The socialist PASOK and the New Democracy parties have both supported the bailout deal and its stringent conditions. The smaller parties are hoping to ride on the back of a wave of discontent that has swept the country in recent months, with some asking for a renegotiation of the terms of the bailout and some even calling for an exit from the euro itself.
Greece's aid pacGreece's aid pac
10.54am: In Greece, list of polling stations are pinned up on boards as the country gets ready for Sunday's election.10.54am: In Greece, list of polling stations are pinned up on boards as the country gets ready for Sunday's election.
Correction: these aren't the actual list of candidates as I first though. Apologies.Correction: these aren't the actual list of candidates as I first though. Apologies.
10.20am: The latest polling from France suggests that Nicolas Sarkozy is about to be ejected from the Palais de l'Élysée.10.20am: The latest polling from France suggests that Nicolas Sarkozy is about to be ejected from the Palais de l'Élysée.
Two polls published this morning put François Hollande ahead by 53.5% to 46.5%. A third was closer, at 52.5% to 47.5%.Two polls published this morning put François Hollande ahead by 53.5% to 46.5%. A third was closer, at 52.5% to 47.5%.
Some expects think it will be closer than that. Professor Dominique Reynié, director of the influential Paris-based thinktank Fondapol, believes Hollande will only win by a whisker.Some expects think it will be closer than that. Professor Dominique Reynié, director of the influential Paris-based thinktank Fondapol, believes Hollande will only win by a whisker.
But what would a Hollande presidency mean? Despite Sarkozy labelling his rival as a dangerous fiscal extremist who would plunge Europe back into a deep crisis, most City analysts have a more sober view.But what would a Hollande presidency mean? Despite Sarkozy labelling his rival as a dangerous fiscal extremist who would plunge Europe back into a deep crisis, most City analysts have a more sober view.
Elisabeth Afseth of Investec is encouraged by the prospect of Hollande stirring things up in Brussels:Elisabeth Afseth of Investec is encouraged by the prospect of Hollande stirring things up in Brussels:
Recent economic data has given some indication of how severe the downturn coming in the wake of the fiscal contraction can be. Fiscal consolidation of course has to happen, and there is no 'painless' way out of current problems, but the risk is that the strict focus on austerity does not address the underlying problemRecent economic data has given some indication of how severe the downturn coming in the wake of the fiscal contraction can be. Fiscal consolidation of course has to happen, and there is no 'painless' way out of current problems, but the risk is that the strict focus on austerity does not address the underlying problem
Nicholas Spiro of Spiro Sovereign Strategy reckons Hollande has limited room for manoeuvre, but will make the most of it:Nicholas Spiro of Spiro Sovereign Strategy reckons Hollande has limited room for manoeuvre, but will make the most of it:
He is likely to test the resilience of France's creditworthiness on the grounds that it is strong enough to accommodate more stimulative policies.

France's Socialists are even more distrustful of financial markets. Rather than feeling that they must earn the markets' trust, the Socialists are more likely to take the view that France's bond market can withstand more socially oriented policies.

Mr Hollande's economic advisers appear to be suggesting that "if the markets were really worried about France, our yields would be much higher by now." This smacks of complacency in our view.

Hollandisme will be a far cry from the "let-it-rip socialism" of the early Mitterrand era, yet it is likely to give the markets reasons to be more nervous about French debt.		He is likely to test the resilience of France's creditworthiness on the grounds that it is strong enough to accommodate more stimulative policies.

France's Socialists are even more distrustful of financial markets. Rather than feeling that they must earn the markets' trust, the Socialists are more likely to take the view that France's bond market can withstand more socially oriented policies.

Mr Hollande's economic advisers appear to be suggesting that "if the markets were really worried about France, our yields would be much higher by now." This smacks of complacency in our view.

Hollandisme will be a far cry from the "let-it-rip socialism" of the early Mitterrand era, yet it is likely to give the markets reasons to be more nervous about French debt.
Mujtaba Rahman of Eurasia Group argues that Hollande will struggle to make major changes to Europe's strategyMujtaba Rahman of Eurasia Group argues that Hollande will struggle to make major changes to Europe's strategy
It's going to be easy for Merkel to sign up to Hollande's growth agenda because it means very little in terms of actual substance...However, on the fiscal side, much of Merkel's agenda is now codified in EU legislation.It's going to be easy for Merkel to sign up to Hollande's growth agenda because it means very little in terms of actual substance...However, on the fiscal side, much of Merkel's agenda is now codified in EU legislation.
10.05am: Some good economic news – eurozone retail sales rose in March, a better result than expected.10.05am: Some good economic news – eurozone retail sales rose in March, a better result than expected.
The volume of retail trade across the euro area rose by 0.3%, compared with February. That still leaves it 0.2% lower than the previous year.The volume of retail trade across the euro area rose by 0.3%, compared with February. That still leaves it 0.2% lower than the previous year.
But the data, from Eurostat, also shows that consumers in Europe's weaker countries cut back sharply. Retail sales were down by 2.2% in Portugal, or 5.0% on a year-on-year basis.But the data, from Eurostat, also shows that consumers in Europe's weaker countries cut back sharply. Retail sales were down by 2.2% in Portugal, or 5.0% on a year-on-year basis.
Full details (pdf).Full details (pdf).
9.34am: Here's some reaction to today's poor service sector data, from Howard Archer of IHS Global Insight.9.34am: Here's some reaction to today's poor service sector data, from Howard Archer of IHS Global Insight.
The Eurozone service sector purchasing managers' surveys are truly dire....there is a growing risk that the rate of Eurozone contraction could actually deepen in the second quarter.The Eurozone service sector purchasing managers' surveys are truly dire....there is a growing risk that the rate of Eurozone contraction could actually deepen in the second quarter.
The Eurozone is currently being buffeted by major headwinds, notably including increased fiscal tightening in many countries, high and rising unemployment, and elevated oil prices which are keeping up consumer price inflation and squeezing companies' margins.The Eurozone is currently being buffeted by major headwinds, notably including increased fiscal tightening in many countries, high and rising unemployment, and elevated oil prices which are keeping up consumer price inflation and squeezing companies' margins.
9.14am: This graph shows how Europe's service sector has deteriorated in the last couple of months, (leading to this morning's poor data, see 9.05am)9.14am: This graph shows how Europe's service sector has deteriorated in the last couple of months, (leading to this morning's poor data, see 9.05am)
It also shows the service sector PMI (the blue line) is a good leading indicator for GDP (the orange line).It also shows the service sector PMI (the blue line) is a good leading indicator for GDP (the orange line).
Chris Williamson of Markit believes today's data shows the eurozone will continue shrinking in the second quarter of 2012, having begun contracting in the last three months of 2011.Chris Williamson of Markit believes today's data shows the eurozone will continue shrinking in the second quarter of 2012, having begun contracting in the last three months of 2011.
9.05am: Brace yourselves for a deeper, longer recession in the eurozone.9.05am: Brace yourselves for a deeper, longer recession in the eurozone.
The eurozone service sector has shrunk much faster than expected last month (as implied by the mostly grim data we've seen in the last hour). The final eurozone PMI, just released, came in at 46.9, indicating a sharp downturn in April compared with March (when the PMI was recorded at 49.1).The eurozone service sector has shrunk much faster than expected last month (as implied by the mostly grim data we've seen in the last hour). The final eurozone PMI, just released, came in at 46.9, indicating a sharp downturn in April compared with March (when the PMI was recorded at 49.1).
With any number below 50 indicating a contaction, the message is that the situation in the Eurozone deteriorated in the last few weeks.With any number below 50 indicating a contaction, the message is that the situation in the Eurozone deteriorated in the last few weeks.
Although Ireland and Germany's service sectors still grew, most other countries suffered significant declines.Although Ireland and Germany's service sectors still grew, most other countries suffered significant declines.
Chris Williamson, chief economist at Markit, said business and consumer confidence appears to have deteriorated markedly across the eurozone. He added:Chris Williamson, chief economist at Markit, said business and consumer confidence appears to have deteriorated markedly across the eurozone. He added:
Little can be said to remain of any 'core' of strength in the region. Growth has practically ground to a halt even in Germany, and France has joined Italy and Spain in seeing a strong rate of economic decline.Little can be said to remain of any 'core' of strength in the region. Growth has practically ground to a halt even in Germany, and France has joined Italy and Spain in seeing a strong rate of economic decline.
8.54am: France's service sector began shrinking in April. Its service sector PMI came in at a six-month low of 45.2 -- after managing a tiny bit of growth in March (when the PMI came in at 50.1).8.54am: France's service sector began shrinking in April. Its service sector PMI came in at a six-month low of 45.2 -- after managing a tiny bit of growth in March (when the PMI came in at 50.1).
But Germany is doing better -- its service sector kept growing last month, according to Markit, with a PMI of 52.2. That's slightly higher than March (52.1).But Germany is doing better -- its service sector kept growing last month, according to Markit, with a PMI of 52.2. That's slightly higher than March (52.1).
8.47am: The latest Italian service sector data is as bad as the Spanish (see 8.27am). Activity fell for the 11th month in a row, at its fastest rate for almost three years, down to 42.3 from 44.3 in March.8.47am: The latest Italian service sector data is as bad as the Spanish (see 8.27am). Activity fell for the 11th month in a row, at its fastest rate for almost three years, down to 42.3 from 44.3 in March.
Markit, which compiles the data, said is shows that the deterioration of the Italian economy accelerated in April. It's already in recession.Markit, which compiles the data, said is shows that the deterioration of the Italian economy accelerated in April. It's already in recession.
8.39am: One reason there's so much uncertainty over the Greek elections is that opinion polling data has not been published since April 20 (Greece's electoral law doesn't allow it).8.39am: One reason there's so much uncertainty over the Greek elections is that opinion polling data has not been published since April 20 (Greece's electoral law doesn't allow it).
But the consensus is still that no party will win an overall majority, and that Pasok and New Democracy (the two main parties in the current coalition), might struggle to win enough seats to form a majority between them. Ten different parties could easily win seats in the parliament, many of whom oppose Greece's financial programme.But the consensus is still that no party will win an overall majority, and that Pasok and New Democracy (the two main parties in the current coalition), might struggle to win enough seats to form a majority between them. Ten different parties could easily win seats in the parliament, many of whom oppose Greece's financial programme.
The Wall Street Journal has a good take this morning -- in which it argues that Greece could go to the polls again later this year :The Wall Street Journal has a good take this morning -- in which it argues that Greece could go to the polls again later this year :
Many party officials expect elections by the fall. Some, especially in New Democracy, say fresh elections could happen as early as June.Many party officials expect elections by the fall. Some, especially in New Democracy, say fresh elections could happen as early as June.
New Democracy and Pasok typically dominate Parliament, and take turns governing. But on Sunday they will be lucky to reach a majority of the 300 seats in Parliament between them, thanks to booming support for protest parties, ranging from Marxist-Leninists to neo-Nazis.New Democracy and Pasok typically dominate Parliament, and take turns governing. But on Sunday they will be lucky to reach a majority of the 300 seats in Parliament between them, thanks to booming support for protest parties, ranging from Marxist-Leninists to neo-Nazis.
"We are probably going to wind up with a New Democracy-Pasok coalition if they get the seats, which they might not," says David Lea, an analyst at Control Risks, an independent risk-consulting firm. "Either way, another round of elections before year-end is entirely possible.""We are probably going to wind up with a New Democracy-Pasok coalition if they get the seats, which they might not," says David Lea, an analyst at Control Risks, an independent risk-consulting firm. "Either way, another round of elections before year-end is entirely possible."
Reuters is also warning that the Greek elections are a major risk to the eurozone.Reuters is also warning that the Greek elections are a major risk to the eurozone.
Some economists take the view that Sunday's election could push Greece back to the nadir it touched in November last year, when there was widespread talk of an exit from the euro zone. The contagion effect would drive Spanish and Italian bond yields straight back into the danger zone, economists say.Some economists take the view that Sunday's election could push Greece back to the nadir it touched in November last year, when there was widespread talk of an exit from the euro zone. The contagion effect would drive Spanish and Italian bond yields straight back into the danger zone, economists say.
8.27am: Spain's service sector has suffered its 10th monthly contraction, according to data just released.8.27am: Spain's service sector has suffered its 10th monthly contraction, according to data just released.
The Spanish service sector PMI (which measures whether output is rising or falling across a sector) fell to 42.1 in April, from 46.3 in March. That's a large monthly fall, and may show that the Spanish recession is accelerating. Any number below 50 means activity declined.The Spanish service sector PMI (which measures whether output is rising or falling across a sector) fell to 42.1 in April, from 46.3 in March. That's a large monthly fall, and may show that the Spanish recession is accelerating. Any number below 50 means activity declined.
This graph shows how PMI data often tracks GDP.This graph shows how PMI data often tracks GDP.
8.18am: European big three stock markets are all lower in early trading.8.18am: European big three stock markets are all lower in early trading.
German DAX: down 40 points, or 0.6%, at 6653
French CAC: down 23 points, or 0.74%, at 3199
FTSE 100: down 9 points, or 0.17%, at 5756		German DAX: down 40 points, or 0.6%, at 6653
French CAC: down 23 points, or 0.74%, at 3199
FTSE 100: down 9 points, or 0.17%, at 5756
Michael Hewson of CMC Markets reckons traders are also disappointed that the European Central Bank didn't announce any new measures at Thursday's meeting in Barcelona.Michael Hewson of CMC Markets reckons traders are also disappointed that the European Central Bank didn't announce any new measures at Thursday's meeting in Barcelona.
Yesterday's decision by ECB President Mario Draghi that there would be no further help in the near term for the European financial system was a blow to those who thought that in light of this week's disappointing economic data that the ECB would hint at further help if the economic outlook continued to darken.Yesterday's decision by ECB President Mario Draghi that there would be no further help in the near term for the European financial system was a blow to those who thought that in light of this week's disappointing economic data that the ECB would hint at further help if the economic outlook continued to darken.
It would appear that Mr Draghi intends to keep the pressure firmly on European governments to pursue the reformagenda in exchange for any future help,It would appear that Mr Draghi intends to keep the pressure firmly on European governments to pursue the reformagenda in exchange for any future help,
But the Spanish IBEX has actually risen 52 points, or 0.7%, to 6094.But the Spanish IBEX has actually risen 52 points, or 0.7%, to 6094.
8.11am: Here's a quick agenda (so regular reader Helianthe can make some predictions, like yesterday):8.11am: Here's a quick agenda (so regular reader Helianthe can make some predictions, like yesterday):
• Italian/French/German service sector PMI for April: from 8.45am BST / 9.45am CEST
• Eurozone service sector PMI for April: 9am BST / 10am CEST
• Eurozone retail sales for March: 10am BST / 11am CEST
• US non-farm payrolls: 1.30pm BST / 8.30am EST		• Italian/French/German service sector PMI for April: from 8.45am BST / 9.45am CEST
• Eurozone service sector PMI for April: 9am BST / 10am CEST
• Eurozone retail sales for March: 10am BST / 11am CEST
• US non-farm payrolls: 1.30pm BST / 8.30am EST
The Pasok party is also holding rallies in Athens today - trying to find out the timing (shout if you know!)The Pasok party is also holding rallies in Athens today - trying to find out the timing (shout if you know!)
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.
Coming up … pre-election fever is building across Europe, ahead of Sunday's presidential elections in France, and the parliamentary ballot in Greece. The battle between François Hollande and Nicolas Sarkozy is nail-bitingly close, while the Greek vote could deliver a very divided parliament, throwing the country's euro future into confusion.Coming up … pre-election fever is building across Europe, ahead of Sunday's presidential elections in France, and the parliamentary ballot in Greece. The battle between François Hollande and Nicolas Sarkozy is nail-bitingly close, while the Greek vote could deliver a very divided parliament, throwing the country's euro future into confusion.
Financial markets are expected to fall this morning, as traders get edgy about the consequences of both races.Financial markets are expected to fall this morning, as traders get edgy about the consequences of both races.
On the economic front, new eurozone service sector and retail sales figures will be released this morning. And then there's the biggie: the US non-farm payroll - the key measure of American unemployment.On the economic front, new eurozone service sector and retail sales figures will be released this morning. And then there's the biggie: the US non-farm payroll - the key measure of American unemployment.