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| Eurozone crisis live: Greece braced for new elections as deadlock continues | Eurozone crisis live: Greece braced for new elections as deadlock continues |
| (40 minutes later) | |
| 11.23am: Herman Van Rompuy, president of the European Council, has just announced that he will host on informal dinner of Heads of State or Government on Wednesday, 23 May, to discuss how European growth. | |
| Will Greece be able to send its new prime minister? | |
| 11.15am: A quick update from Helena Smith on how Syriza will use its three-day window for negotiations. | |
| Syriza's press office has just confirmed that Alexis Tsipras will hold talks with various leftists parties and labour groups tromorrow before meeting the leaders of Greece's two mainstream parties, Pasok and New Democracy and the head of the breakaway conservative, stridently anti-austerity Independent Greeks party on Thursday. | |
| As explained at 10.15am, Tsipras will begin by holding talks with the KKE communist party this afternoon (if they can lay aside their Marxist-Leninist doctrinal issues....) | |
| 11.05am: Germany's industrial heartland continues to ride out the crisis. | |
| Data just released showed that German industrial production jumped by 2.8% in March, beating economist forecasts of a 0.8% rise. | |
| The German economy ministry also reported that industial activity was gaining pace (there was also a bounceback from February, when output fell by 0.3%). It added that "the outlook for industry has improved significantly". | |
| Looking for reaction now | |
| 10.51am: Our correspondent Helena Smith has the latest on the mood in Athens, ahead of Greece's leftist leader being given a mandate to form a government. Helena reports that there is mounting anticipation this morning over the possibility that a government led by forces on the left could being formed, although the hurdles are formidable. | 10.51am: Our correspondent Helena Smith has the latest on the mood in Athens, ahead of Greece's leftist leader being given a mandate to form a government. Helena reports that there is mounting anticipation this morning over the possibility that a government led by forces on the left could being formed, although the hurdles are formidable. |
Syriza, | Alexis Tsipras, who head Syriza the suprise winner in Sunday's election, is expected to be given a mandate to try and create a government at 2 PM local time by president Carolos Papoulias, the country's head of state. Syriza, Tripras's coalition of ex European communists, Maoists, Trotskyists, socialists and greens can scarcely believe its luck. This is the first time that leftist forces, unilaterally, have been given the chance to enter the corridors of power. Tsipras is expected to reach out to all parties starting with the virulently anti-European hardline KKE communist party whose symbol remains the hammer and sickle. The two parties, in a dispute that started with the rise of former Soviet leader Mikhail Gorbachev (Glastnost and Gorbachev's perceived rejection of Marxist-Leninist doctrine) have been at daggers drawn for decades. |
| Senior cadres say unlike the conservative leader Antonis Samaras, who made use of the mandate in a record four hours "as if he wanted to get it out of the way," Tsipras will use all three of the days at his disposal to try and rally forces. "On paper it might not look as if we can't do it, as if the numbers don't add up but we will approach all the parties [with the exception fo the ultra-nationalist Chrysi Avgi] to see if they would be willing to endorse such a government." | Senior cadres say unlike the conservative leader Antonis Samaras, who made use of the mandate in a record four hours "as if he wanted to get it out of the way," Tsipras will use all three of the days at his disposal to try and rally forces. "On paper it might not look as if we can't do it, as if the numbers don't add up but we will approach all the parties [with the exception fo the ultra-nationalist Chrysi Avgi] to see if they would be willing to endorse such a government." |
| This morning senior Syriza officials were at pains to say that the party's objective was not " a euro exit for Greece" but renegotiating new terms on which it could continue to receive the rescue funds now keeping the debt-stricken economy afloat. | This morning senior Syriza officials were at pains to say that the party's objective was not " a euro exit for Greece" but renegotiating new terms on which it could continue to receive the rescue funds now keeping the debt-stricken economy afloat. |
| Syriza MPs contend that the ultimatum "bailout or bankruptcy" has been overblown and is little more than a scare-tactic used by the mainstream parties to whip up support for the "barbaric measures" outlined in the deeply unpopular fiscal adjustment program that it entails. | Syriza MPs contend that the ultimatum "bailout or bankruptcy" has been overblown and is little more than a scare-tactic used by the mainstream parties to whip up support for the "barbaric measures" outlined in the deeply unpopular fiscal adjustment program that it entails. |
| "The loan agreement has been rejected. That was the message of the election," Panaghiotis Lafazanis, a senior Syriza MP told a radio show. "We are fighting for change through change [in the policies] of Europe." | "The loan agreement has been rejected. That was the message of the election," Panaghiotis Lafazanis, a senior Syriza MP told a radio show. "We are fighting for change through change [in the policies] of Europe." |
| 10.44am: The euro has been weakening this morning, and is now down over half a cent to $1.3010. | 10.44am: The euro has been weakening this morning, and is now down over half a cent to $1.3010. |
| The single currency remains very vulnerable to the political uncertainty across Europe. Jane Foley of Rabobank explained that Greece, France and Spain are all alarming traders, who could send the euro loer | The single currency remains very vulnerable to the political uncertainty across Europe. Jane Foley of Rabobank explained that Greece, France and Spain are all alarming traders, who could send the euro loer |
News that public money will be used to bail out Bankia is the latest test for the Spanish government. It is hoped that the injection of funds will help clarify Bankia's position. | News that public money will be used to bail out Bankia is the latest test for the Spanish government. It is hoped that the injection of funds will help clarify Bankia's position. |
| The risk, however, is that investors will see this as a signal that more bad news will follow from Spain's banking sector. Against this backdrop we expect the EUR to remain on the back foot for now and retain our forecast that dips towards EUR/USD1.28 are likely. | The risk, however, is that investors will see this as a signal that more bad news will follow from Spain's banking sector. Against this backdrop we expect the EUR to remain on the back foot for now and retain our forecast that dips towards EUR/USD1.28 are likely. |
| My colleague Giles Tremlett wrote here about the latest developments in the Spanish banking sector. It appears likely that Bankia, the country's third largest bank, needs billions of euros in fresh capital. | My colleague Giles Tremlett wrote here about the latest developments in the Spanish banking sector. It appears likely that Bankia, the country's third largest bank, needs billions of euros in fresh capital. |
| 10.42am: European Commission president José Manuel Barroso and Commissioner for economic affairs Olli Rehn are due to hold a press conference in around half an hour, reports Peter Spiegel, the FT's man in Brussels. | 10.42am: European Commission president José Manuel Barroso and Commissioner for economic affairs Olli Rehn are due to hold a press conference in around half an hour, reports Peter Spiegel, the FT's man in Brussels. |
| #EU Commission Pres #Barroso and econ chief #Rehn to hold presser at 12:15pm local time. Clear your afternoon. #eurocrisis | #EU Commission Pres #Barroso and econ chief #Rehn to hold presser at 12:15pm local time. Clear your afternoon. #eurocrisis |
| — Peter Spiegel (@SpiegelPeter) May 8, 2012 | — Peter Spiegel (@SpiegelPeter) May 8, 2012 |
| 10.34am: Open Europe, the think tank, predicts that Greece could be embarking on a series of elections. Its reading of Sunday's results is that a stable coalition government may not be possible, even after one more trip to the ballot box. | 10.34am: Open Europe, the think tank, predicts that Greece could be embarking on a series of elections. Its reading of Sunday's results is that a stable coalition government may not be possible, even after one more trip to the ballot box. |
Open Europe writes: | Open Europe writes: |
| Given the showing in the elections it is hard to imagine New Democracy, or any party, gaining a clear majority. Given the strength of the anti-austerity feeling in Greece it is unlikely that these results would be a one-off. | Given the showing in the elections it is hard to imagine New Democracy, or any party, gaining a clear majority. Given the strength of the anti-austerity feeling in Greece it is unlikely that these results would be a one-off. |
| The anti-austerity parties only look likely to gain ground in subsequent elections, making a stable coalition less likely. This analysis suggests that a cycle of elections looks increasingly probable in Greece. | The anti-austerity parties only look likely to gain ground in subsequent elections, making a stable coalition less likely. This analysis suggests that a cycle of elections looks increasingly probable in Greece. |
| If you missed the Greek election results, here's how the seats fell: | If you missed the Greek election results, here's how the seats fell: |
| New Democracy – (18.86%) 108 seats SYRIZA – (16.77%) 52 seats Pasok – (13.18%) 41 seats Independent Greeks – (10.6%) 33 seats KKE (Communist party) – (8.48%) 26 seats Golden Dawn (far-right) – (6.97%) 21 seats Democratic Left – (6.1%) 19 seats | New Democracy – (18.86%) 108 seats SYRIZA – (16.77%) 52 seats Pasok – (13.18%) 41 seats Independent Greeks – (10.6%) 33 seats KKE (Communist party) – (8.48%) 26 seats Golden Dawn (far-right) – (6.97%) 21 seats Democratic Left – (6.1%) 19 seats |
| 10.13am: Greece's borrowing costs have risen, slightly, at an auction of short-term debt. | 10.13am: Greece's borrowing costs have risen, slightly, at an auction of short-term debt. |
| The Athens debt management agency found buyers for €1.3bn of six-month bonds (repayable in November), at an average yield of 4.69%. That's up from the previous auction of this type, when buyers demanded a 4.55% yield. | The Athens debt management agency found buyers for €1.3bn of six-month bonds (repayable in November), at an average yield of 4.69%. That's up from the previous auction of this type, when buyers demanded a 4.55% yield. |
| But in the current climate, we should probably be relieved that the auction was a success. It will allow Greece to 'rollover' debt sold at an earlier auction which matures on Friday. | But in the current climate, we should probably be relieved that the auction was a success. It will allow Greece to 'rollover' debt sold at an earlier auction which matures on Friday. |
| 9.50am: The man who represented Greece's creditors through its recent torturous bond swap negotiations has warned this morning that Europe must break its focus on austerity. | 9.50am: The man who represented Greece's creditors through its recent torturous bond swap negotiations has warned this morning that Europe must break its focus on austerity. |
| Charles Dallara of the Institute for International Finance added his weight to the growing calls for a change of direction. Dallara told CNBC's "Squawk Box Europe" that: | Charles Dallara of the Institute for International Finance added his weight to the growing calls for a change of direction. Dallara told CNBC's "Squawk Box Europe" that: |
| We've seen the European economy within the political framework has disconnected. The overall focus on short-term budget cuts has to be adapted with economic reality. | We've seen the European economy within the political framework has disconnected. The overall focus on short-term budget cuts has to be adapted with economic reality. |
| If we can get private investors' confidence rebuilt, we can change the situation around in Greece. The focus has been too heavily placed in short-term budget cuts and this has created the feeling that the situation seems bottomless. | If we can get private investors' confidence rebuilt, we can change the situation around in Greece. The focus has been too heavily placed in short-term budget cuts and this has created the feeling that the situation seems bottomless. |
| Dallara predicted that Germany will eventually have to "re-evaluate the current economic strategy" and allow weaker members of the eurozone more time to rebuild their finances. | Dallara predicted that Germany will eventually have to "re-evaluate the current economic strategy" and allow weaker members of the eurozone more time to rebuild their finances. |
| More details here. | More details here. |
| Perhaps Greece's creditors are getting nervous that the new bonds they accepted via the debt swap might fail. Two in three votes cast in last weekend's election went to parties which oppose the bailout deal, in a sign that many Greek people will not accept the price of its financial aid deal. | Perhaps Greece's creditors are getting nervous that the new bonds they accepted via the debt swap might fail. Two in three votes cast in last weekend's election went to parties which oppose the bailout deal, in a sign that many Greek people will not accept the price of its financial aid deal. |
| Officially, Dallara remained positive over the political situation in Greece, saying: | Officially, Dallara remained positive over the political situation in Greece, saying: |
| when the dust settles we will have a government that comes together that has little choice but to preserve in many aspects the economic reform program. | when the dust settles we will have a government that comes together that has little choice but to preserve in many aspects the economic reform program. |
| 9.25am: So, who is Alexis Tsipras, the man who will attempt to form a new Greek government today? | 9.25am: So, who is Alexis Tsipras, the man who will attempt to form a new Greek government today? |
| Well, he was born just a few days after the fall of the Greek military dictatorship in 1974. Today, the 37-year-old is the youngest leader of a Greek political party. | Well, he was born just a few days after the fall of the Greek military dictatorship in 1974. Today, the 37-year-old is the youngest leader of a Greek political party. |
| He was an active youth politician, and was involved in a famous protest organised by school students against education minister Vasilis Kontogiannopoulos. | He was an active youth politician, and was involved in a famous protest organised by school students against education minister Vasilis Kontogiannopoulos. |
| Tsipras first joined the Greek Communist Youth, and later became part of the Coalition of the Radical Left which he now leads. He studied civil engineering at the National Technical University of Athens (NTUS). | Tsipras first joined the Greek Communist Youth, and later became part of the Coalition of the Radical Left which he now leads. He studied civil engineering at the National Technical University of Athens (NTUS). |
| Unlike certain well-groomed rivals, Tsipras dresses down and is often driving around Athens on a motorcycle. | Unlike certain well-groomed rivals, Tsipras dresses down and is often driving around Athens on a motorcycle. |
| Descriptions of Tsipras vary, from "young and charismatic" to "brash and self-assured". Some observers question whether he has the experience to play a leading role in Greek politics, others argue that he represents much-needed political change. | Descriptions of Tsipras vary, from "young and charismatic" to "brash and self-assured". Some observers question whether he has the experience to play a leading role in Greek politics, others argue that he represents much-needed political change. |
| 9.20am: Oops, missed this in the early agenda. Greece is aiming to auction €1bn of bonds this morning, in the form of six-month treasury bills. Previously, such short-term debt has proved quite popular with bond traders, but that might not be the case in the current crisis. Gary Jenkins of Swordfish Research reckons the sale "could be interesting".... | 9.20am: Oops, missed this in the early agenda. Greece is aiming to auction €1bn of bonds this morning, in the form of six-month treasury bills. Previously, such short-term debt has proved quite popular with bond traders, but that might not be the case in the current crisis. Gary Jenkins of Swordfish Research reckons the sale "could be interesting".... |
| 8.53am: Greek daily newspaper Kathimerini warns today that Greece is rapidly approaching another crisis point, after New Democracy admitted last night it could not form a government. | 8.53am: Greek daily newspaper Kathimerini warns today that Greece is rapidly approaching another crisis point, after New Democracy admitted last night it could not form a government. |
| In an editorial, the paper writes: | In an editorial, the paper writes: |
| The country is heading at high speed towards catastrophe. | The country is heading at high speed towards catastrophe. |
| If a national salvation government is not formed in the coming days, new elections will become inevitable. | If a national salvation government is not formed in the coming days, new elections will become inevitable. |
| Yet, last night, Syriza leader Alexis Tsipras indicated that a national salvation government could not be formed, as the differences between the various parties who won seats in last weekend's elections are too wide. Tsipras said: | Yet, last night, Syriza leader Alexis Tsipras indicated that a national salvation government could not be formed, as the differences between the various parties who won seats in last weekend's elections are too wide. Tsipras said: |
| "There can be no 'government of national salvation' as [Samaras] has called it because his signatures and commitments to the loan agreement do not constitute salvation but a tragedy for the people and the country. | "There can be no 'government of national salvation' as [Samaras] has called it because his signatures and commitments to the loan agreement do not constitute salvation but a tragedy for the people and the country. |
| 8.42am: European stock markets are a mixed bag in early trading. Some up, some down, but no sign of panic. Here's a round-up: | 8.42am: European stock markets are a mixed bag in early trading. Some up, some down, but no sign of panic. Here's a round-up: |
| French CAC: - 41 points, or -1.29%, at 3172 German DAX: - 20 points, or -0.3%, at 6548 Spanish IBEX: + 13 points, or + 0.2%, at 70674 FTSE 100: - 6 points, or -0.1%, at 5648 | French CAC: - 41 points, or -1.29%, at 3172 German DAX: - 20 points, or -0.3%, at 6548 Spanish IBEX: + 13 points, or + 0.2%, at 70674 FTSE 100: - 6 points, or -0.1%, at 5648 |
| In London, traders have returned to their desks after Monday's May Day bank holiday (yes, we know 1 May was last Tuesday. Put it down to British eccentricity). As city veteran David Buik commented: | In London, traders have returned to their desks after Monday's May Day bank holiday (yes, we know 1 May was last Tuesday. Put it down to British eccentricity). As city veteran David Buik commented: |
| We expect a ponderous start with volatility and nervousness being generated from Greece's very unhealthy political and economic outlook. | We expect a ponderous start with volatility and nervousness being generated from Greece's very unhealthy political and economic outlook. |
| 8.24am: New Greek elections could come as early as 17 June, the Financial Times reckons, if a coalition cannot be agreed in the next few days. | 8.24am: New Greek elections could come as early as 17 June, the Financial Times reckons, if a coalition cannot be agreed in the next few days. |
| In the reader comments, meljomur asks: | In the reader comments, meljomur asks: |
| How easy is it to vote in Greece? Does the system make it "challenging" for those who are more likely to vote for the fringe parties? | How easy is it to vote in Greece? Does the system make it "challenging" for those who are more likely to vote for the fringe parties? |
| Those of you in Greece (are you there, Kizbot?) will have a better idea than me about the intricacies of Greek elections. The election results suggest that 'fringe parties' overcame any such hurdles (such as the 3% threshold to win seats in parliament) , with Pasok and New Democracy taking such a pasting at the polls. | Those of you in Greece (are you there, Kizbot?) will have a better idea than me about the intricacies of Greek elections. The election results suggest that 'fringe parties' overcame any such hurdles (such as the 3% threshold to win seats in parliament) , with Pasok and New Democracy taking such a pasting at the polls. |
| UPDATE: There's a great summary of Greek election law here on Radiobubble.gr (with thanks to the fantastic Theodora Oikonomides, who blogs as @irategreek). | UPDATE: There's a great summary of Greek election law here on Radiobubble.gr (with thanks to the fantastic Theodora Oikonomides, who blogs as @irategreek). |
| 8.13am: Alexis Tsipras, the leader of Syriza, holds Greece's political future in his hands today after landing second place in last weekend's eelction. | 8.13am: Alexis Tsipras, the leader of Syriza, holds Greece's political future in his hands today after landing second place in last weekend's eelction. |
| The Radical Coalition of the Left, as Syriza is also known, ran on a policy of opposing Greece's current aid plan. Tsipras has vowed to freeze payments to creditors and renegotiate part of the €130bn package that was finally agreed in March. | The Radical Coalition of the Left, as Syriza is also known, ran on a policy of opposing Greece's current aid plan. Tsipras has vowed to freeze payments to creditors and renegotiate part of the €130bn package that was finally agreed in March. |
| Tsipras and Antonis Samaras may have been all smiles as they met yesterday, but the two men failed to find common ground (not surprisingly, as Samaras's New Democracy party supports the aid deal). | Tsipras and Antonis Samaras may have been all smiles as they met yesterday, but the two men failed to find common ground (not surprisingly, as Samaras's New Democracy party supports the aid deal). |
| As Helena Smith wrote, Samaras took to national TV last night to admit that the talks had failed: | As Helena Smith wrote, Samaras took to national TV last night to admit that the talks had failed: |
| Attempts to form a new government in Athens have collapsed after the leader of the centre-right New Democracy party announced that he was unable to form a coalition in the crisis-hit country. | Attempts to form a new government in Athens have collapsed after the leader of the centre-right New Democracy party announced that he was unable to form a coalition in the crisis-hit country. |
| "We did whatever was possible," Antonis Samaras told Greeks in a national address, saying he had reached out to every party with the exception of the far-right Chrysi Avgi (Golden Dawn), which was catapulted into parliament in Sunday's election. | "We did whatever was possible," Antonis Samaras told Greeks in a national address, saying he had reached out to every party with the exception of the far-right Chrysi Avgi (Golden Dawn), which was catapulted into parliament in Sunday's election. |
| 8.00am: If you missed Monday's action (it was a bank holiday in the UK), then you can catch up with all the action in our live blog from yesterday, anchored by my colleague Julia Kollewe. It was an exciting day - continental stock markets fell sharply at the start of trading, before recovering later in the day as traders and analysts digested the implications of the elections in France and Greece. | 8.00am: If you missed Monday's action (it was a bank holiday in the UK), then you can catch up with all the action in our live blog from yesterday, anchored by my colleague Julia Kollewe. It was an exciting day - continental stock markets fell sharply at the start of trading, before recovering later in the day as traders and analysts digested the implications of the elections in France and Greece. |
| 7.51am: Today's eurozone news agenda will be dominated by the negotiations in Athens. Syriza, also known as the Coalition of the Radical Left, will sit down at the negotiating table and try to persuade other parties to join it in government. | 7.51am: Today's eurozone news agenda will be dominated by the negotiations in Athens. Syriza, also known as the Coalition of the Radical Left, will sit down at the negotiating table and try to persuade other parties to join it in government. |
| Otherwise, it's a quiet data on the economic front - apart from a survey of German industrial production that will show how Europe's largest economy performed in March. A few bond auctions are also taking place, which will let us gauge the mood in the financial markets | Otherwise, it's a quiet data on the economic front - apart from a survey of German industrial production that will show how Europe's largest economy performed in March. A few bond auctions are also taking place, which will let us gauge the mood in the financial markets |
| • Greek coalition talks: • German industrial production for March: 11am BST / noon CEST • Austria (€1.21bn), the Netherlands (€2bn-€3bn)+ Belgium bond auctions: morning • Greek bond auction: €1bn of 26-week bonds - 10am BST | • Greek coalition talks: • German industrial production for March: 11am BST / noon CEST • Austria (€1.21bn), the Netherlands (€2bn-€3bn)+ Belgium bond auctions: morning • Greek bond auction: €1bn of 26-week bonds - 10am BST |
| 7.45am: Good morning, and welcome back to our rolling coverage of the eurozone debt crisis. | 7.45am: Good morning, and welcome back to our rolling coverage of the eurozone debt crisis. |
| Today, the threat of new elections in Greece looms over the eurozone, as political parties struggle to form a new government. Syriza, the left-wing party, will hold talks with rivals today, after New Democracy admitted it could not build a coalition. | Today, the threat of new elections in Greece looms over the eurozone, as political parties struggle to form a new government. Syriza, the left-wing party, will hold talks with rivals today, after New Democracy admitted it could not build a coalition. |
| If a deal can't be reached, a second election would be inevitable. | If a deal can't be reached, a second election would be inevitable. |
| The deadlock in Athens comes as speculation swirls of a multi-billion euro bank bailout in Spain. | The deadlock in Athens comes as speculation swirls of a multi-billion euro bank bailout in Spain. |
| While in France, François Hollande will be working on his new government - as Europe watches to see how the new French president puts his opposition to the fiscal treaty into action. | While in France, François Hollande will be working on his new government - as Europe watches to see how the new French president puts his opposition to the fiscal treaty into action. |
| We're expecting a calmer day in the financial markets after yesterday's gyrations, but that could change as the situation in Greece becomes clearer. | We're expecting a calmer day in the financial markets after yesterday's gyrations, but that could change as the situation in Greece becomes clearer. |