This article is from the source 'guardian' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.

You can find the current article at its original source at http://www.guardian.co.uk/business/2012/may/15/eurozone-crisis-gdp-greek-government-talks

The article has changed 18 times. There is an RSS feed of changes available.

Version 7 Version 8
Eurozone crisis live: Greek talks continue as eurozone dodges recession Eurozone crisis live: Greek talks continue as eurozone dodges recession
(40 minutes later)
1.23pm: It's that time of the day when European finance ministers start opining on the Greek crisis.
Sweden's finance minister Anders Borg has told reporters in Brussels that we are now "very close to the end of the road regarding Greece", and that Greece must "seriously consider" if wants to remain in the eurozone (quotes via Dow Jones).
Sweden, of course, isn't actually in the eurozone, but it is still exposed to the crisis. The IMF warned today that subdued exports are likely to reduce output this year, mainly due to the weak European economy.
1.05pm: Here's a snap from the wires of Alexis Tsipras, seemingly the rising star of Greek politics, and his staff arriving for today's meeting in the presidential palace in Athens.
12.49pm: My colleague Nick Mead has created an interactive map showing how Europe's economies have fared over the last year, including today's GDP data.12.49pm: My colleague Nick Mead has created an interactive map showing how Europe's economies have fared over the last year, including today's GDP data.
Click here to see it in action.Click here to see it in action.
12.25pm: While negotiations over the "government of personalities" begin in Athens (see 12.12pm), it's worth checking out the views of Greece's former prime minister, Costas Simitis, today.12.25pm: While negotiations over the "government of personalities" begin in Athens (see 12.12pm), it's worth checking out the views of Greece's former prime minister, Costas Simitis, today.
The man who oversaw the country's entry into the euro zone in 2001 has been making some interesting comments about the crisis today. Helena Smith has the details:The man who oversaw the country's entry into the euro zone in 2001 has been making some interesting comments about the crisis today. Helena Smith has the details:
Addressing a forum in Beijing, the 75-year-old politician said Greece's exit from the common currency would be a "catastrophe."Addressing a forum in Beijing, the 75-year-old politician said Greece's exit from the common currency would be a "catastrophe."
"The idea of coming back to the drachma is an idea that cannot function," Simitis, whose first foreign language is German, said in slightly idiosyncratic English."The idea of coming back to the drachma is an idea that cannot function," Simitis, whose first foreign language is German, said in slightly idiosyncratic English.
The former socialist leader insisted that speculation of a euro exit was a "discussion without sense" and said, more than anything else, he believed it was really about political parties "trying to renegotiate the conditions [of rescue fund handouts] with the European Union."The former socialist leader insisted that speculation of a euro exit was a "discussion without sense" and said, more than anything else, he believed it was really about political parties "trying to renegotiate the conditions [of rescue fund handouts] with the European Union."
Withdrawal from the common currency was irrational, he said, because it would require banks to shut for a period of "at least three months" while printing of a new currency was carried out and preparations were made.
"Having the banks close for three months – that's nonsense," he said. "If they close more than three days there will be a bank run."		Withdrawal from the common currency was irrational, he said, because it would require banks to shut for a period of "at least three months" while printing of a new currency was carried out and preparations were made.
"Having the banks close for three months – that's nonsense," he said. "If they close more than three days there will be a bank run."
But if this is all about bargaining over measures that have clearly been rejected by majority vote (nearly 70% backed "anti-bailout" parties in the May 6th elections), then Greece is also playing a dangerous game.But if this is all about bargaining over measures that have clearly been rejected by majority vote (nearly 70% backed "anti-bailout" parties in the May 6th elections), then Greece is also playing a dangerous game.
Alexis Tsipra, whose Syriza party has benefited most from anti-austerity sentiment, was warned by his mentor, the veteran leftist Alekos Alavanos this week, that rejection of Athens' loan agreement with creditors would also mean leaving the 17-nation bloc. Tsipras has said the controversial accord should be "torn up."Alexis Tsipra, whose Syriza party has benefited most from anti-austerity sentiment, was warned by his mentor, the veteran leftist Alekos Alavanos this week, that rejection of Athens' loan agreement with creditors would also mean leaving the 17-nation bloc. Tsipras has said the controversial accord should be "torn up."
"The left must warn the people responsibly. Not only by telling them that the road away from the bailout is also the road that leads to exiting the euro," Alavanos wrote in an opinion piece on the news website tometopo.gr "But also that it will be particularly painful. But with prospects.""The left must warn the people responsibly. Not only by telling them that the road away from the bailout is also the road that leads to exiting the euro," Alavanos wrote in an opinion piece on the news website tometopo.gr "But also that it will be particularly painful. But with prospects."
12.24pm: My colleague Giles Tremlett gets in touch from Madrid with an update on the latest developments in Spain, another key part of the eurozone crisis:12.24pm: My colleague Giles Tremlett gets in touch from Madrid with an update on the latest developments in Spain, another key part of the eurozone crisis:
While Spanish banks dominate the headlines, this is also a key week for sorting out what markets see as the country's other major headache (barring, of course, massive unemployment and recession) – which are the budgets of the regional governments.While Spanish banks dominate the headlines, this is also a key week for sorting out what markets see as the country's other major headache (barring, of course, massive unemployment and recession) – which are the budgets of the regional governments.
Spain missed its 6% deficit target spectacularly last year, hitting 8.5% instead. This is precisely because of the regions - which run health and education and, so, do much of Spain's public spending. The two biggest regions, Catalonia and Andalucia are presenting budget plans today.Spain missed its 6% deficit target spectacularly last year, hitting 8.5% instead. This is precisely because of the regions - which run health and education and, so, do much of Spain's public spending. The two biggest regions, Catalonia and Andalucia are presenting budget plans today.
Catalonia has just announced the privatisation of motorways and water companies, as well as a fire sale of public property. Andalucia is expected to cut civil service pay.Catalonia has just announced the privatisation of motorways and water companies, as well as a fire sale of public property. Andalucia is expected to cut civil service pay.
On Thursday all the regions meet with budget minister Cristobal Montoro to have their budgets approved (or not).On Thursday all the regions meet with budget minister Cristobal Montoro to have their budgets approved (or not).
12.12pm: The talks between the Greek president and five political leaders over the formation of a national unity government to lead Greece forwards and end the mounting political uncertainty engulfing the country have just begun.12.12pm: The talks between the Greek president and five political leaders over the formation of a national unity government to lead Greece forwards and end the mounting political uncertainty engulfing the country have just begun.
Helena Smith reports that five leaders have just been ushered into the presidential palace. Television channels have broadcast footage of them sitting around an oval table with president Carolos Papoulias at the head.Helena Smith reports that five leaders have just been ushered into the presidential palace. Television channels have broadcast footage of them sitting around an oval table with president Carolos Papoulias at the head.
As on Sunday, there are again strained smiles although this time mixed with an air of gravity amid heightened concerns over Greece's place in the the euro zone.As on Sunday, there are again strained smiles although this time mixed with an air of gravity amid heightened concerns over Greece's place in the the euro zone.
The five leaders are New Democracy's Antonis Samaras, Syriza's Alexis Tsipras, Pasok's Evangelos Venizelos, Independent Greeks' Panos Kammenos, and Democratic Left's Fotis Kouvelis.The five leaders are New Democracy's Antonis Samaras, Syriza's Alexis Tsipras, Pasok's Evangelos Venizelos, Independent Greeks' Panos Kammenos, and Democratic Left's Fotis Kouvelis.
They must consider Papoulias's proposal that a government of technocrats or respected personalities should be formed, after repeated negotiations for a coalition government have failed.They must consider Papoulias's proposal that a government of technocrats or respected personalities should be formed, after repeated negotiations for a coalition government have failed.
12.01pm: Here's another picture from the break-up of the austerity protests in Athens (see also 11.55am).12.01pm: Here's another picture from the break-up of the austerity protests in Athens (see also 11.55am).
11.55am: It appears that police in Greece have broken up a small protest against austerity in Syntagma Square, the site near the Athens parliament.11.55am: It appears that police in Greece have broken up a small protest against austerity in Syntagma Square, the site near the Athens parliament.
Pictures from the scene show officers forcibly detaining protesters, before taking some away in a police van.Pictures from the scene show officers forcibly detaining protesters, before taking some away in a police van.
Greek newspaper Kathimerini reports on its website that around 25 people from "Spain, Italy, Ireland, France and Greece" had pitched tents in the square yesterday, and that 16 people were arrested.Greek newspaper Kathimerini reports on its website that around 25 people from "Spain, Italy, Ireland, France and Greece" had pitched tents in the square yesterday, and that 16 people were arrested.
11.41am: Finance ministers have been arriving in Brussels for today's meeting.11.41am: Finance ministers have been arriving in Brussels for today's meeting.
Here's what George Osbone said to the press pack:Here's what George Osbone said to the press pack:
This is a time of considerable uncertainty in the eurozone economies and that uncertainty is undermining the entire European recovery.This is a time of considerable uncertainty in the eurozone economies and that uncertainty is undermining the entire European recovery.
I think we are reaching a point where we have got to make a decision to see the eurozone stand behind their currency.I think we are reaching a point where we have got to make a decision to see the eurozone stand behind their currency.
A very important part of that, of course, is strengthening the entire European banking system, and that is what we intend to do today.A very important part of that, of course, is strengthening the entire European banking system, and that is what we intend to do today.
European finance ministers are expected to reach a deal on core capital requirements for the region's banks today.European finance ministers are expected to reach a deal on core capital requirements for the region's banks today.
10.56am: The news that the eurozone has avoided recession is politically tricky for the UK government, which has repeatedly blamed Britain's economic woes on the problems over the English Channel.10.56am: The news that the eurozone has avoided recession is politically tricky for the UK government, which has repeatedly blamed Britain's economic woes on the problems over the English Channel.
Just last night, chancellor George Osborne warned that the eurozone crisis was affecting the wider economy, saying in Brussels that:Just last night, chancellor George Osborne warned that the eurozone crisis was affecting the wider economy, saying in Brussels that:

The euro zone crisis is having a real impact on growth across the European continent, including Britain....
The euro zone crisis is having a real impact on growth across the European continent, including Britain....
The British recovery has been damaged over the last two years not by Britain getting a grip on its public finances but by uncertainty in the euro zone.The British recovery has been damaged over the last two years not by Britain getting a grip on its public finances but by uncertainty in the euro zone.
So it's somewhat embarrassing to now find that the Eurozone managed to avoid contracting in the last three months, while the UK shrank by 0.2% (although, in the spirit of balance, many business leaders reckon that reading was too negative).So it's somewhat embarrassing to now find that the Eurozone managed to avoid contracting in the last three months, while the UK shrank by 0.2% (although, in the spirit of balance, many business leaders reckon that reading was too negative).
Ed Balls, Labour's shadow chancellor, has already argued that today's GDP data shows the UK's double-dip was caused by domestic policy.Ed Balls, Labour's shadow chancellor, has already argued that today's GDP data shows the UK's double-dip was caused by domestic policy.
After all George Osborne's bluster, Germany & France avoid recession -confirming the UK does have a recession made in Downing StreetAfter all George Osborne's bluster, Germany & France avoid recession -confirming the UK does have a recession made in Downing Street
— Ed Balls (@edballsmp) May 15, 2012— Ed Balls (@edballsmp) May 15, 2012
10.53am: Spain (anothe country in recession) is increasingly sending out SOS messages to its eurozone partners.10.53am: Spain (anothe country in recession) is increasingly sending out SOS messages to its eurozone partners.
My colleague Giles Tremlett reports from Madrid:My colleague Giles Tremlett reports from Madrid:
Finance minister Luis de Guindos has today suggested the European Central Bank should help with the two valuations of total bank assets that Spain's government is to commission from independent valuers. Fellow eurozone ministers are pressing for Spain to complete the valuations quickly, but the task is huge. De Guindos says they will try to get it done in two months.Finance minister Luis de Guindos has today suggested the European Central Bank should help with the two valuations of total bank assets that Spain's government is to commission from independent valuers. Fellow eurozone ministers are pressing for Spain to complete the valuations quickly, but the task is huge. De Guindos says they will try to get it done in two months.
Spain's conservative People's party government, ideologically aligned with Angela Merkel, went into the eurogroup meeting claiming it is doing all it can to sort out banks and deficit-spending, while pushing ahead with key labour market and budget reforms.Spain's conservative People's party government, ideologically aligned with Angela Merkel, went into the eurogroup meeting claiming it is doing all it can to sort out banks and deficit-spending, while pushing ahead with key labour market and budget reforms.
If that is not enough to stop bond yields soaring (and yesterday they reached their highest level since the nerve-shattering month of November, with the interest on ten year bonds closing at over 6.2 percent), then the eurozone must react as a whole, De Guindos said. "What we need now is cooperation from the eurozone and a joint reply," (to market pressures) he said.If that is not enough to stop bond yields soaring (and yesterday they reached their highest level since the nerve-shattering month of November, with the interest on ten year bonds closing at over 6.2 percent), then the eurozone must react as a whole, De Guindos said. "What we need now is cooperation from the eurozone and a joint reply," (to market pressures) he said.
10.41am: A quick shout-out for my colleague Andrew Sparrow, who will soon be interviewing Robert Chote, head of the Office for Budget Responsibility. Chote is the man who scrutinises the UK budgets to ensure they are based credible economic foreacsts -- effectively he's Britain's budget regulator. We'd love to hear your questions for Chote -- so if you've got one, please post it over here.10.41am: A quick shout-out for my colleague Andrew Sparrow, who will soon be interviewing Robert Chote, head of the Office for Budget Responsibility. Chote is the man who scrutinises the UK budgets to ensure they are based credible economic foreacsts -- effectively he's Britain's budget regulator. We'd love to hear your questions for Chote -- so if you've got one, please post it over here.
10.31am: Here's a round-up of reaction ot the surprising news that the eurozone is not in recession:10.31am: Here's a round-up of reaction ot the surprising news that the eurozone is not in recession:
Mads Koefoed of SaxobankMads Koefoed of Saxobank
Germany is leading the bloc, but this doesn't mean we will have a strong rebound, austerity is not going away and southern European economies are really struggling.
We are looking at stagnation to very mild growth in the year to come.		Germany is leading the bloc, but this doesn't mean we will have a strong rebound, austerity is not going away and southern European economies are really struggling.
We are looking at stagnation to very mild growth in the year to come.
Howard Archer of IHS Global InsightHoward Archer of IHS Global Insight
The Eurozone has struggled for any growth at all since the first quarter of 2011.
While it is welcome news that the Eurozone avoided recession, its performance is hardly something to celebrate as GDP was only flat year-on-year in the first quarter of 2012. Furthermore, generally weaker latest data and, particularly, survey evidence suggests that renewed GDP contraction is very much on the menu for the second quarter.		The Eurozone has struggled for any growth at all since the first quarter of 2011.
While it is welcome news that the Eurozone avoided recession, its performance is hardly something to celebrate as GDP was only flat year-on-year in the first quarter of 2012. Furthermore, generally weaker latest data and, particularly, survey evidence suggests that renewed GDP contraction is very much on the menu for the second quarter.
Jennifer McKeown of Capital MarketsJennifer McKeown of Capital Markets
The region remains heavily reliant on Germany, where activity rose by a better-than-expected 0.5 percent, thanks mainly to strong net trade.
Looking ahead, the situation will only get worse as the periphery remains mired in recession and German exports falter.		The region remains heavily reliant on Germany, where activity rose by a better-than-expected 0.5 percent, thanks mainly to strong net trade.
Looking ahead, the situation will only get worse as the periphery remains mired in recession and German exports falter.
Ranvir Singh, chief executive of RANsquawkRanvir Singh, chief executive of RANsquawk
At the top of the pile are the Germans, quietly assured of the power and reliability of their export-driven economy.At the top of the pile are the Germans, quietly assured of the power and reliability of their export-driven economy.
In the middle sits France, which is heading the other way but has so far just teetered on the edge of recession. Modest growth at the end of 2011 turned slipped into stagnation in the first three months of this year.In the middle sits France, which is heading the other way but has so far just teetered on the edge of recession. Modest growth at the end of 2011 turned slipped into stagnation in the first three months of this year.
[But]With recessions battering Spain, Greece and Portugal, the Eurozone as a whole was pegged back to stagnation in the first quarter of 2012.[But]With recessions battering Spain, Greece and Portugal, the Eurozone as a whole was pegged back to stagnation in the first quarter of 2012.
10.19am: Portugal's economy has also continued to shrink, but at a slower rate.10.19am: Portugal's economy has also continued to shrink, but at a slower rate.
The third member of the eurozone to seek a bailout saw its GDP fall by 0.1% in the first three months of 2012, a much shallower decline than the 1.3% slump seen in Q4 2011.The third member of the eurozone to seek a bailout saw its GDP fall by 0.1% in the first three months of 2012, a much shallower decline than the 1.3% slump seen in Q4 2011.
10.12am: New GDP data from Greece was also just released, and shows that its long, deep recession continued.10.12am: New GDP data from Greece was also just released, and shows that its long, deep recession continued.
On a year-on-year basis, Greek GDP fell by 6.2% in the first three months of 2012.On a year-on-year basis, Greek GDP fell by 6.2% in the first three months of 2012.
That's a year-on-year figure, rather than the quarter-on-quarter data reported by other countries this morning. But it's still indicates a savage fall in activity. Economists have calculated that the Greek economy will have shrunk by 20% between 2008 and 2012.That's a year-on-year figure, rather than the quarter-on-quarter data reported by other countries this morning. But it's still indicates a savage fall in activity. Economists have calculated that the Greek economy will have shrunk by 20% between 2008 and 2012.
10.00am: Breaking news - the eurozone has avoided recession, with GDP remaining flat in the first three months of 2012.10.00am: Breaking news - the eurozone has avoided recession, with GDP remaining flat in the first three months of 2012.
Data just released showed that the economic growth across the 17-member single currency union was 0%, defying economist predictions of a 0.2% contraction (following the 0.3% decline reported in the previous quarter).Data just released showed that the economic growth across the 17-member single currency union was 0%, defying economist predictions of a 0.2% contraction (following the 0.3% decline reported in the previous quarter).
It appears that strong growth in Germany dragged the eurozone away from a second quarterly contraction, with German GDP up by 0.5% (while Italy suffered a 0.8% decline).It appears that strong growth in Germany dragged the eurozone away from a second quarterly contraction, with German GDP up by 0.5% (while Italy suffered a 0.8% decline).
On a year-on-year basis, the eurozone economy also posted flat growth.On a year-on-year basis, the eurozone economy also posted flat growth.
We shouldn't get carried away - stagnation will not solve the eurozone's economic problems. But it's still a small relief.We shouldn't get carried away - stagnation will not solve the eurozone's economic problems. But it's still a small relief.
9.45am: Today's talks over the formation of a 'technocratic government' in Greece appear doomed to fail, even before they begin.9.45am: Today's talks over the formation of a 'technocratic government' in Greece appear doomed to fail, even before they begin.
From Athens, our correspondent Helena Smith reports that Greece's feuding party chiefs are trading blows, in a sign that the political paralysis is not easing. Helena writes:From Athens, our correspondent Helena Smith reports that Greece's feuding party chiefs are trading blows, in a sign that the political paralysis is not easing. Helena writes:
In a new twist to the escalating drama engulfing Athens, political party leaders are back at it again: firing salvos of venom at each other and, above all, pouring cold water on the latest possible exit route out of the crisis by forming a government of "personalities."In a new twist to the escalating drama engulfing Athens, political party leaders are back at it again: firing salvos of venom at each other and, above all, pouring cold water on the latest possible exit route out of the crisis by forming a government of "personalities."
The technocrat solution was tountamount to "the defeat of politics," said Fotis Kouvellis who heads the small Democrat Left party.The technocrat solution was tountamount to "the defeat of politics," said Fotis Kouvellis who heads the small Democrat Left party.
"I told the President ... that a government formed by technocrats and personalities means the defeat of politics. I expressed that I am against it.""I told the President ... that a government formed by technocrats and personalities means the defeat of politics. I expressed that I am against it."
Greece's head of state Carolos Papoulias was reported this morning as telling leaders that their differences where "insignificant" compared with their "duty towards the country."Greece's head of state Carolos Papoulias was reported this morning as telling leaders that their differences where "insignificant" compared with their "duty towards the country."
The president, who proposed that personalities man a new government in what is being seen as the VERY LAST attempt to plug Greece's power vacuum, meets political leaders at 2 PM local time (noon GMT). With the exception of Aleka Papariga, the communist party chief and Nikos Michaloliakos, who heads the neo-fascist Chyrsi Avgi party, the heads of every single party catapulted into parliament in the inconclusive May 6 elections will be there including Left Coalition leader Alexis Tsipras who refused to attend yesterday's talks.The president, who proposed that personalities man a new government in what is being seen as the VERY LAST attempt to plug Greece's power vacuum, meets political leaders at 2 PM local time (noon GMT). With the exception of Aleka Papariga, the communist party chief and Nikos Michaloliakos, who heads the neo-fascist Chyrsi Avgi party, the heads of every single party catapulted into parliament in the inconclusive May 6 elections will be there including Left Coalition leader Alexis Tsipras who refused to attend yesterday's talks.
But the president's pleas appear to have had no impact.But the president's pleas appear to have had no impact.
Hopes of a solution being reached with the help of Panos Kammenos, a former conservative MP who now heads the vehemently anti-austerity breakaway Independent Greeks party were also dashed today. With 33 seats in the 300-member parliament, Kammenos, in effect, could have held the key to a solution. Cooperation with the centre right New Democracy and centre left Socialist Pasok would have given the new 'national unity' government a comfortable 182 seats in the House.Hopes of a solution being reached with the help of Panos Kammenos, a former conservative MP who now heads the vehemently anti-austerity breakaway Independent Greeks party were also dashed today. With 33 seats in the 300-member parliament, Kammenos, in effect, could have held the key to a solution. Cooperation with the centre right New Democracy and centre left Socialist Pasok would have given the new 'national unity' government a comfortable 182 seats in the House.
But this morning Kammenos, a blustering right-wing populist, said he would not attend a separate one-hour meeting with Papoulias prior to the talks following the "provocative" distribution of a highly sensitive document attributed to his party. The paper, which had been circulated by the presidential office to party leaders, said Independent Greeks would support a unity government if it were a matter of "national urgency." Independent Greeks, which has described the EU-IMF imposed austerity and structural reform program as a form of "foreign occupation" reportedly also said it would accept to participate in such a coalition if given the portfolio of the defense ministry.But this morning Kammenos, a blustering right-wing populist, said he would not attend a separate one-hour meeting with Papoulias prior to the talks following the "provocative" distribution of a highly sensitive document attributed to his party. The paper, which had been circulated by the presidential office to party leaders, said Independent Greeks would support a unity government if it were a matter of "national urgency." Independent Greeks, which has described the EU-IMF imposed austerity and structural reform program as a form of "foreign occupation" reportedly also said it would accept to participate in such a coalition if given the portfolio of the defense ministry.
Speaking to Skai radio this morning, Kammenos said: "This document is not mine, it has never been submitted by Independent Greeks, it is not stamped, nor does it have a protocol number. I did not give it to the president.Speaking to Skai radio this morning, Kammenos said: "This document is not mine, it has never been submitted by Independent Greeks, it is not stamped, nor does it have a protocol number. I did not give it to the president.
With Greece's euro zone member ship on the line and the stakes so high, the infighting has left many aghast. "I really don't see how there is any way out apart from going to fresh elections," Nikos Evangelatos, a veteran observer of the political scene, told a local radio station. "At least elections will give everyone [the parties] the chance to air their views."With Greece's euro zone member ship on the line and the stakes so high, the infighting has left many aghast. "I really don't see how there is any way out apart from going to fresh elections," Nikos Evangelatos, a veteran observer of the political scene, told a local radio station. "At least elections will give everyone [the parties] the chance to air their views."
Many Greek citizens sound weary of the ongoing saga, with Diane Shugart questioning the its democratic legitimacy on Twitter:Many Greek citizens sound weary of the ongoing saga, with Diane Shugart questioning the its democratic legitimacy on Twitter:
good morning from the cradle of democracy--government by the people appointed by a few people for the peoplegood morning from the cradle of democracy--government by the people appointed by a few people for the people
— Diane Shugart (@dianalizia) May 15, 2012— Diane Shugart (@dianalizia) May 15, 2012
9.12am: There's quite a lot of interest this morning in comments made last night by Jean-Claude Juncker, the chairman of the eurogroup of finance ministers.9.12am: There's quite a lot of interest this morning in comments made last night by Jean-Claude Juncker, the chairman of the eurogroup of finance ministers.
Asked whether the eurogroup has considered the chances of Greece exiting the euro at yesterday's talks, Juncker responded that such talk was "propaganda and nonsense".Asked whether the eurogroup has considered the chances of Greece exiting the euro at yesterday's talks, Juncker responded that such talk was "propaganda and nonsense".
Juncker continued:Juncker continued:

The exit of Greece out of the euro was not the subject of our debate today. Absolutely no one, absolutely no one, argued in that sense....
The exit of Greece out of the euro was not the subject of our debate today. Absolutely no one, absolutely no one, argued in that sense....
But the Greek public, the Greek citizens, have to know that we agreed on a programme and this programme has to be implemented.But the Greek public, the Greek citizens, have to know that we agreed on a programme and this programme has to be implemented.
Hmmm. If Juncker is being completely honest, that's actually rather worrying. The idea of Greece leaving the euro isn't just a media contruct -- many economist believe it may be inevitable.Hmmm. If Juncker is being completely honest, that's actually rather worrying. The idea of Greece leaving the euro isn't just a media contruct -- many economist believe it may be inevitable.
However, Juncker's comments have been well-received in Athens, our Greece correspondent Helena Smith informs me:However, Juncker's comments have been well-received in Athens, our Greece correspondent Helena Smith informs me:
Radio stations commentators have been quoting Juncker as saying: "I don't envisage, not even for one second, Greece leaving. " Many have sounded "quite relieved."Radio stations commentators have been quoting Juncker as saying: "I don't envisage, not even for one second, Greece leaving. " Many have sounded "quite relieved."
9.00am: Italy's recession is getting worse -- with news breaking that GDP shrank by 0.8% in the first quarter of 2012.9.00am: Italy's recession is getting worse -- with news breaking that GDP shrank by 0.8% in the first quarter of 2012.
That's worse than expected, and much worse than other data this morning (such as Germany's 0.5% expansion and France's flat performance). Italy has now been shrinking for the past nine months.That's worse than expected, and much worse than other data this morning (such as Germany's 0.5% expansion and France's flat performance). Italy has now been shrinking for the past nine months.
The biggest drop in quarterly GDP in three years comes just hours after rating agency Moody's downgraded 26 Italian banks.The biggest drop in quarterly GDP in three years comes just hours after rating agency Moody's downgraded 26 Italian banks.
8.58am: Over in Greece, reports are coming in that the Athens government will repay a €450m bond which matures today. There had been speculation that the country might have withheld the money, which is due to investors who refused to take part in this year's debt swap, which would have added another level of uncertainty to the crisis.8.58am: Over in Greece, reports are coming in that the Athens government will repay a €450m bond which matures today. There had been speculation that the country might have withheld the money, which is due to investors who refused to take part in this year's debt swap, which would have added another level of uncertainty to the crisis.
8.44am: The recession in the Netherlands has continued, with data just released showing that the Dutch economy shrank by 0.2% in the first three months of 2012.8.44am: The recession in the Netherlands has continued, with data just released showing that the Dutch economy shrank by 0.2% in the first three months of 2012.
That's the third quarterly contraction in a row, at a time when the Netherlands faces political uncertainty following the collapse of its government last month.That's the third quarterly contraction in a row, at a time when the Netherlands faces political uncertainty following the collapse of its government last month.
And outside the eurozone, Hungary has suffered its first fall in GDP since 2009, with a 0.7% drop in output in Q1 2012.And outside the eurozone, Hungary has suffered its first fall in GDP since 2009, with a 0.7% drop in output in Q1 2012.
Other data has been more optimistic this morning, with Austria growing by 0.2% in the first three months of 2012.Other data has been more optimistic this morning, with Austria growing by 0.2% in the first three months of 2012.
8.22am: European stock markets have recovered in early trading, thanks to the better-than-expected economic data from Germany this morning (see 7.52am).8.22am: European stock markets have recovered in early trading, thanks to the better-than-expected economic data from Germany this morning (see 7.52am).
FTSE 100: up 27 points, or 0.4%, at 5487
German DAX: up 45 points, or 0.7%, at 6497
French CAC: up 26 points, or 0.8%, at 3084
Spanish IBEX: up 41 points, or 0.6%, at 6852
Italilan FTSE MIB: up 88 points, or 0.6%, at 13744.		FTSE 100: up 27 points, or 0.4%, at 5487
German DAX: up 45 points, or 0.7%, at 6497
French CAC: up 26 points, or 0.8%, at 3084
Spanish IBEX: up 41 points, or 0.6%, at 6852
Italilan FTSE MIB: up 88 points, or 0.6%, at 13744.
8.12am: This morning's GDP data from France and Germany adds another twist to Angela Merkel and François Hollande's meeting today. A stagnating French economy could reinforce Hollande's case for a new growth pact, while Merkel's domestic audience may feel that their economy is performing quite well as things stand.8.12am: This morning's GDP data from France and Germany adds another twist to Angela Merkel and François Hollande's meeting today. A stagnating French economy could reinforce Hollande's case for a new growth pact, while Merkel's domestic audience may feel that their economy is performing quite well as things stand.
Our Europe editor Ian Traynor has predicted that Hollande faces a baptism of fire when he arrives in Germany fresh from his inauguration:Our Europe editor Ian Traynor has predicted that Hollande faces a baptism of fire when he arrives in Germany fresh from his inauguration:
If the Frenchman has the advantage of freshness to the German's slightly jaded air, the underlying reality is of German strength and relative French weakness. The crisis of the past two years has laid bare the myth that the traditional Franco-German relationship at the EU's core is a partnership of equals.If the Frenchman has the advantage of freshness to the German's slightly jaded air, the underlying reality is of German strength and relative French weakness. The crisis of the past two years has laid bare the myth that the traditional Franco-German relationship at the EU's core is a partnership of equals.
"France has much less clout in the EU than Germany. The financial crisis and the euro crisis have highlighted the vulnerabilities of the French economy: its waning competitiveness," wrote Charles Grant, director of the Centre for European Reform."France has much less clout in the EU than Germany. The financial crisis and the euro crisis have highlighted the vulnerabilities of the French economy: its waning competitiveness," wrote Charles Grant, director of the Centre for European Reform.
Merkel may be weakened at home as a result of the North-Rhine Westphalia defeat and increasingly isolated internationally for her euro policies which are also under fire from Washington and the International Monetary Fund.Merkel may be weakened at home as a result of the North-Rhine Westphalia defeat and increasingly isolated internationally for her euro policies which are also under fire from Washington and the International Monetary Fund.
But she remains personally popular in Germany and by far the most powerful EU leader. She has no intention of reopening her eurozone fiscal pact, which Hollande has consistently criticised. But the new French leader also looks likely to make a difference.But she remains personally popular in Germany and by far the most powerful EU leader. She has no intention of reopening her eurozone fiscal pact, which Hollande has consistently criticised. But the new French leader also looks likely to make a difference.
After years of Merkel and Sarkozy cutting deals in private and then presenting faits accomplis to the rest of Europe, Hollande will be less open to doing Berlin's bidding.After years of Merkel and Sarkozy cutting deals in private and then presenting faits accomplis to the rest of Europe, Hollande will be less open to doing Berlin's bidding.
7.52am: Germany's economy roared back to growth in the first three months of 2012, according to data released this morning.7.52am: Germany's economy roared back to growth in the first three months of 2012, according to data released this morning.
Germany GDP increased by 0.5% between January and March, recovering from the 0.2% contraction in the final three months of 2011. Much better than the 0.1% expansion pencilled in by City economists.Germany GDP increased by 0.5% between January and March, recovering from the 0.2% contraction in the final three months of 2011. Much better than the 0.1% expansion pencilled in by City economists.
Net exports were the main driver of growth quarter-to-quarter, another indication that Germany has not been badly hit by the eurozone crisis.Net exports were the main driver of growth quarter-to-quarter, another indication that Germany has not been badly hit by the eurozone crisis.
So, no double-dip in Europe's powerhouse economy. But also a sign that the eurozone's two-speed economy may be getting worse (data released last month showed that Spain is in recession, and more data will be released this morning).So, no double-dip in Europe's powerhouse economy. But also a sign that the eurozone's two-speed economy may be getting worse (data released last month showed that Spain is in recession, and more data will be released this morning).
Jeremy Cook, chief economist at World First, argues that the data shows the impossibility of setting monetary policy across such divergent economies:Jeremy Cook, chief economist at World First, argues that the data shows the impossibility of setting monetary policy across such divergent economies:
German GDP of 0.5% further emphasises the fact that a strong Europe is impossible with a strong GermanyGerman GDP of 0.5% further emphasises the fact that a strong Europe is impossible with a strong Germany
— World First (@World_First) May 15, 2012— World First (@World_First) May 15, 2012
7.42am: The news that the French economy stagnated in the first three months of 2012 underlines the challenge faced by new president François Hollande.7.42am: The news that the French economy stagnated in the first three months of 2012 underlines the challenge faced by new president François Hollande.
Paris-based national statistics office Insee reported this morning that French GDP was unchanged compared with the fourth quarter (when it expanded by a meagre 0.1%).Paris-based national statistics office Insee reported this morning that French GDP was unchanged compared with the fourth quarter (when it expanded by a meagre 0.1%).
Hollande could take comfort in the fact that the French economy isn't actually suffering an Anglo-Saxon double-dip recession. But looking into the figures, it was flattered by an increase in government spending, while business investment fell by 0.7% (which could hit growth down the line).Hollande could take comfort in the fact that the French economy isn't actually suffering an Anglo-Saxon double-dip recession. But looking into the figures, it was flattered by an increase in government spending, while business investment fell by 0.7% (which could hit growth down the line).
Economists warn that the French economy is on a slippery path, making it hard for Hollande to reduce the deficit without crushing growth. As Societe Generale economist Michel Martinez put it (via Bloomberg):Economists warn that the French economy is on a slippery path, making it hard for Hollande to reduce the deficit without crushing growth. As Societe Generale economist Michel Martinez put it (via Bloomberg):
The new government faces a high-wire act.The new government faces a high-wire act.
A hardening budget stance will only make things more difficult in the months ahead....Too heavy tax increases could cause growth to falter.A hardening budget stance will only make things more difficult in the months ahead....Too heavy tax increases could cause growth to falter.
7.40am: Good morning, and welcome to our rolling coverage of the eurozone financial crisis.7.40am: Good morning, and welcome to our rolling coverage of the eurozone financial crisis.
Coming up.... in Greece, another round of last-ditch, make-or-break talks will take place in Athens today, nine days after the general election. President Karolos Papoulias will propose setting up a 'government of technocrats', after the leaders of the main political parties failed to form a coalition.Coming up.... in Greece, another round of last-ditch, make-or-break talks will take place in Athens today, nine days after the general election. President Karolos Papoulias will propose setting up a 'government of technocrats', after the leaders of the main political parties failed to form a coalition.
The Greek crisis will also dominate a meeting of EU finance ministers in Brussels today. After Monday's heavy falls on world stock markets, leaders are under relentless pressure to solve the crisis.The Greek crisis will also dominate a meeting of EU finance ministers in Brussels today. After Monday's heavy falls on world stock markets, leaders are under relentless pressure to solve the crisis.
Economically it's a big day, with eurozone GDP for Q1 2012 being released. We've already had data from France (which stagnated with 0% change to GDP), and Germany (which smashed forecasts with a 0.5% rise). More on these shortly.....Economically it's a big day, with eurozone GDP for Q1 2012 being released. We've already had data from France (which stagnated with 0% change to GDP), and Germany (which smashed forecasts with a 0.5% rise). More on these shortly.....
And on the political front, François Hollande is being sworn in as France's new president, and will immediately fly to Germany to meet with Angela Merkel to discuss the crisis.And on the political front, François Hollande is being sworn in as France's new president, and will immediately fly to Germany to meet with Angela Merkel to discuss the crisis.