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Eurozone crisis live: Markets slump after Bundesbank says Greek exit is 'manageable' Eurozone crisis live: Markets slump after Bundesbank says Greek exit is 'manageable'
(40 minutes later)
6.06pm: You can see a live feed of events in Brussel right here, streamed on the European Commission's website. 6.45pm: Over in Greece today, pharmacists held a day of industrial action to highlight a growing healthcare crisis.
It shows that leaders are gathering for talks. There's the usual glad-handing and hugging, and a lot of serious faces. A shortages of medicines is exacerbated by panic among patients unable to access cancer or cardiac drugs, the industry warns. As Helena Smith reports from Athens:
The insolvent country's worsening liquidity has led to public insurers being unable to pay their bills and prescription drugs running dangerously low, say chemists. On Wednesday, the sector staged a one-day strike to highlight the "emergency situation".
More here.
6.26pm: This evening's informal summit has officially started in Brussels.
Here's another shot of the scene:
Alas the live webfeed has been turned off - just as it would have been getting interesting.
6.15pm: Here's a snap of French president François Hollande and Italy's technocratic prime minister Mario Monti exchanging words as the summit starts.
Alas there was no audio on the feed, so we can't guess what they were saying.
6.06pm: In Brussels, leaders are now gathering ready for tonight's informal summit.
You can see a live feed of events in Brussel right here, streamed on the European Commission's website.
There's the usual glad-handing and hugging, and a lot of serious faces.
5.55pm: Prime minister David Cameron said he was hopeful this evening that some progress will be made tonight, at what he called an "important meeting". He repeated his argument from the House of Commons this lunchtime, that the eurozone's problems need to be resolved, for good, soon:5.55pm: Prime minister David Cameron said he was hopeful this evening that some progress will be made tonight, at what he called an "important meeting". He repeated his argument from the House of Commons this lunchtime, that the eurozone's problems need to be resolved, for good, soon:
If we are not going to keep coming back and back to meetings like this, we also need to deal with some of the longer term issues at the heart of a successful single currency, having a bank that gets behind that single currency, having coherent long term plans to make sure that single currency is coherent.If we are not going to keep coming back and back to meetings like this, we also need to deal with some of the longer term issues at the heart of a successful single currency, having a bank that gets behind that single currency, having coherent long term plans to make sure that single currency is coherent.
We have to address those issues too or these crises will keep occurring.We have to address those issues too or these crises will keep occurring.
5.35pm: We can't accuse Angela Merkel of inflating hopes ahead of tonight's summit. Speaking in Brussels in the last few minutes, the German chancellor declared that she doesn't see any decisions being taken tonight, just an exchange of views.5.35pm: We can't accuse Angela Merkel of inflating hopes ahead of tonight's summit. Speaking in Brussels in the last few minutes, the German chancellor declared that she doesn't see any decisions being taken tonight, just an exchange of views.
Nothing will be decided today. It's an exchange of opinions and then a final agenda at the end of June.Nothing will be decided today. It's an exchange of opinions and then a final agenda at the end of June.
She's also certain of one thing -- eurobonds are against EU law, and would do nothing to help growth. Got that, François?She's also certain of one thing -- eurobonds are against EU law, and would do nothing to help growth. Got that, François?
Merkel also told reporters that she will propose a "deeper internal market", and more labour mobility within the EU. That may satisfy calls for Europe to improve the single market and deliver long-term improvements to competitiveness. It won't ease immediate fears over Greece and the risks of contagion sweeping through Southern Europe like a firestorm.Merkel also told reporters that she will propose a "deeper internal market", and more labour mobility within the EU. That may satisfy calls for Europe to improve the single market and deliver long-term improvements to competitiveness. It won't ease immediate fears over Greece and the risks of contagion sweeping through Southern Europe like a firestorm.
So don't bother keeping the kids up late tonight to watch the excitement in Brussels -- this isn't going to be a repeat of last Saturday's drama in Munich*.So don't bother keeping the kids up late tonight to watch the excitement in Brussels -- this isn't going to be a repeat of last Saturday's drama in Munich*.
* - oops, no Berlin. It's all German to me...* - oops, no Berlin. It's all German to me...
5.11pm: It gets worse. Belgium's finance minister has said it would be "irresponsible" to say that Europe doesn't have a contingency plan for the scenario in which Greece leaves the euro.5.11pm: It gets worse. Belgium's finance minister has said it would be "irresponsible" to say that Europe doesn't have a contingency plan for the scenario in which Greece leaves the euro.
Just minute after Greece issued its blunt denial that any such plan was agreed this week (see last post), Steven Vanackere told reporters in Brussels that there certainly are plans in place to cope with a Grexit.Just minute after Greece issued its blunt denial that any such plan was agreed this week (see last post), Steven Vanackere told reporters in Brussels that there certainly are plans in place to cope with a Grexit.
Vanackere said:Vanackere said:

All the contingency plans (for Greece) come back to the same thing: to be responsible as a government is to foresee even what you hope to avoid.
All the contingency plans (for Greece) come back to the same thing: to be responsible as a government is to foresee even what you hope to avoid.
We must insist on efforts to avoid an exit scenario but that doesn't mean we are not preparing for eventualities. I believe many countries have their contingency plans for the things they want to avoid at all cost, like terrorist attacks, and to say that we don't have a contingency plan would be irresponsible.We must insist on efforts to avoid an exit scenario but that doesn't mean we are not preparing for eventualities. I believe many countries have their contingency plans for the things they want to avoid at all cost, like terrorist attacks, and to say that we don't have a contingency plan would be irresponsible.
4.50pm: The Greek finance ministry has just issued a vehement denial that individual member states were asked to draw up contingency plans in the event of a Greek exit from the 17-nation euro zone. 4.50pm: The Greek finance ministry has just issued a vehement denial that individual member states were asked to draw up contingency plans in the event of a Greek exit from the 17-nation euro zone.
The Hellenic Republic Ministry of Finance just released a bluntly worded response to today's report from Reuters (see 1.15pm onwards) that the Eurozone Working Group had decided on Monday that emergency plans were needed.The Hellenic Republic Ministry of Finance just released a bluntly worded response to today's report from Reuters (see 1.15pm onwards) that the Eurozone Working Group had decided on Monday that emergency plans were needed.
It said:It said:
The finance ministry categorically denies reports which claim that during a teleconference call of the Europe working group, member states were asked to prepare contingency plans in the case of Greece exiting the euro.The finance ministry categorically denies reports which claim that during a teleconference call of the Europe working group, member states were asked to prepare contingency plans in the case of Greece exiting the euro.
Such reports not only are not representative of reality but harm the efforts of the country to confront its problems.Such reports not only are not representative of reality but harm the efforts of the country to confront its problems.


And here's the statement in Greek (we spoil you!):

And here's the statement in Greek (we spoil you!):
Tο Υπουργείο Οικονομικών διαψεύδει κατηγορηματικά δημοσιεύματα τα οποία αναφέρουν, πως στην τηλεδιάσκεψη που πραγματοποιήθηκε στο πλαίσιο του Euro Working Group, ζητήθηκε απο τα κράτη μέλη να ετοιμάσουν σχέδια αντιμετώπισης ενδεχόμενης εξόδου της Ελλάδας απο το ευρώ.Tο Υπουργείο Οικονομικών διαψεύδει κατηγορηματικά δημοσιεύματα τα οποία αναφέρουν, πως στην τηλεδιάσκεψη που πραγματοποιήθηκε στο πλαίσιο του Euro Working Group, ζητήθηκε απο τα κράτη μέλη να ετοιμάσουν σχέδια αντιμετώπισης ενδεχόμενης εξόδου της Ελλάδας απο το ευρώ.
Τέτοιου είδους δημοσιεύματα όχι μόνο δεν αντιστοιχούν στην πραγματικότητα, αλλά κάνουν κακό στην προσπάθεια που καταβάλει η χώρα να αντιμετωπίσει τα προβλήματά της.Τέτοιου είδους δημοσιεύματα όχι μόνο δεν αντιστοιχούν στην πραγματικότητα, αλλά κάνουν κακό στην προσπάθεια που καταβάλει η χώρα να αντιμετωπίσει τα προβλήματά της.
4.44pm:Over to Greece where our correspondent Helena Smith says while much rests on next month's electoral result in Athens, whatever the outcome, Germany officials may well be disappointed.

Helena writes:		4.44pm:Over to Greece where our correspondent Helena Smith says while much rests on next month's electoral result in Athens, whatever the outcome, Germany officials may well be disappointed.

Helena writes:
The consensus in Athens is that Alexis Tsipras has had a bad week. It's not just the polls which for the first time since Greece's inconclusive election earlier this month have shown "pro-European" centre right parties coming up from behind – mostly on fears that to support Syriza, his party, would be to endorse Athens' exit from the euro.The consensus in Athens is that Alexis Tsipras has had a bad week. It's not just the polls which for the first time since Greece's inconclusive election earlier this month have shown "pro-European" centre right parties coming up from behind – mostly on fears that to support Syriza, his party, would be to endorse Athens' exit from the euro.
The radical left leader, widely touted as Europe's rising star, is believed to have made a series of clangers climaxing on Monday with his less than flattering remarks while visiting Paris about Francois Hollande the French president. It may be early days but the shift in public opinion is discernible.
Aides to Antonis Samaras the conservative New Democracy leader now leading the "pro-bailout, pro-European front" against anti-austerity forces headed by Syriza have been injected with a new and unexpected optimism.
"We may not have done as well as we thought [in the May 6th poll] but we succeeded with the first part of our plan which was to destroy Pasok, the party of the establishment," one senior aide told me before flying of to Brussels with Samaras for a meeting of European peoples' party leaders on the sidelines of tonight's EU summit. "And now that Greek society is polarized between the left and the right it's a much easier battle to win. Even with a majority of one we can easily appeal to Pasok to come on board in the name of saving the country," he said.		The radical left leader, widely touted as Europe's rising star, is believed to have made a series of clangers climaxing on Monday with his less than flattering remarks while visiting Paris about Francois Hollande the French president. It may be early days but the shift in public opinion is discernible.
Aides to Antonis Samaras the conservative New Democracy leader now leading the "pro-bailout, pro-European front" against anti-austerity forces headed by Syriza have been injected with a new and unexpected optimism.
"We may not have done as well as we thought [in the May 6th poll] but we succeeded with the first part of our plan which was to destroy Pasok, the party of the establishment," one senior aide told me before flying of to Brussels with Samaras for a meeting of European peoples' party leaders on the sidelines of tonight's EU summit. "And now that Greek society is polarized between the left and the right it's a much easier battle to win. Even with a majority of one we can easily appeal to Pasok to come on board in the name of saving the country," he said.
There's some sort of logic here – after all the socialist force, like New Democracy, was hammered by voters for agreeing to endorse high-hitting austerity in return for aid.There's some sort of logic here – after all the socialist force, like New Democracy, was hammered by voters for agreeing to endorse high-hitting austerity in return for aid.
Indicative of the shift in public opinion even taxi drivers are beginning to speak of Tsipras losing the election. Last week there were few who would have said that.Indicative of the shift in public opinion even taxi drivers are beginning to speak of Tsipras losing the election. Last week there were few who would have said that.
BUT there is also mounting speculation that this is EXACTLY what Tsipras may want – a role in opposition where he is able to rally unprecedented opposition in the form of protests and strikes against ever onerous austerity measures demanded by the EU and IMF.BUT there is also mounting speculation that this is EXACTLY what Tsipras may want – a role in opposition where he is able to rally unprecedented opposition in the form of protests and strikes against ever onerous austerity measures demanded by the EU and IMF.
Euro zone leaders may get the government they want in Athens – putting paid to purported contingency plans by the Bundesbank -- but even if they do it does not mean that Greece will be any easier to deal with in the long run.Euro zone leaders may get the government they want in Athens – putting paid to purported contingency plans by the Bundesbank -- but even if they do it does not mean that Greece will be any easier to deal with in the long run.
4.38pm: The rout is over, in Europe at least. And it's a grim picture.4.38pm: The rout is over, in Europe at least. And it's a grim picture.
The FTSE 100 index closed 136 points lower at 5266, a fall of 2.5%. That means another £35.4bn has been wiped off the blue-chip index today.The FTSE 100 index closed 136 points lower at 5266, a fall of 2.5%. That means another £35.4bn has been wiped off the blue-chip index today.
The French CAC lost 2.6% to 3003 points, and Germany's DAX shed 2.3% to 6285. Peripheral markets suffered even more, with the Italian FTSE MIB down 3.7% and the Spanish market off 3.2%.The French CAC lost 2.6% to 3003 points, and Germany's DAX shed 2.3% to 6285. Peripheral markets suffered even more, with the Italian FTSE MIB down 3.7% and the Spanish market off 3.2%.
Somehow fitting that the trading screens of Europe were bathed in red electonic ink as EU leaders prepare for tonight's meeting.Somehow fitting that the trading screens of Europe were bathed in red electonic ink as EU leaders prepare for tonight's meeting.
On Wall Street, the Dow Jones is down 161 points at 12,340, a fall of 1.3%.On Wall Street, the Dow Jones is down 161 points at 12,340, a fall of 1.3%.
4.20pm: David Song, currency analyst at DailyFX, is also pessimistic about the chances of success at tonight's informal summit, saying:4.20pm: David Song, currency analyst at DailyFX, is also pessimistic about the chances of success at tonight's informal summit, saying:
The meeting may reveal a growing rift within the group as the anti-austerity movement gathers pace.The meeting may reveal a growing rift within the group as the anti-austerity movement gathers pace.
However, it seems as though the European Central Bank will carry its wait-and-see approach into the second-half of the year in an effort to secure its independenceHowever, it seems as though the European Central Bank will carry its wait-and-see approach into the second-half of the year in an effort to secure its independence
4.12pm: John Higgins of Capital Economics say shares, and the euro, are being routed this afternoon (details at 4pm) because 'the markets' now fear that tonight's summit will achieve very little to fix the crisis.4.12pm: John Higgins of Capital Economics say shares, and the euro, are being routed this afternoon (details at 4pm) because 'the markets' now fear that tonight's summit will achieve very little to fix the crisis.
Higgins explained:Higgins explained:
Stock markets fell back sharply again on Wednesday and the euro came under further pressure as doubts grew that the evening's informal meeting of EU leaders in Brussels would do much to prevent an imminent exit of Greece from the euro-zone.Stock markets fell back sharply again on Wednesday and the euro came under further pressure as doubts grew that the evening's informal meeting of EU leaders in Brussels would do much to prevent an imminent exit of Greece from the euro-zone.
There might be talk about growth measures, and lobbying for more funding for the European Investment Bank, but nothing to fix the Greek crisis.
And with the euro bobbing around $1.2582, we can see that investors are bracing for this story to end badly....		There might be talk about growth measures, and lobbying for more funding for the European Investment Bank, but nothing to fix the Greek crisis.
And with the euro bobbing around $1.2582, we can see that investors are bracing for this story to end badly....
4.00pm: Today's splurge of deeply worrying developments has sent global stock markets into a full-scale spin.4.00pm: Today's splurge of deeply worrying developments has sent global stock markets into a full-scale spin.
The main European markets are all down by 2.5% or more (FTSE 100 now down 138 points at 5264). Italy's stock market is down 4%.

Traders say there are seveal reasons to panic -- the Bundesbank's prediction that a Greek exit from the eurozone would not be a disaster; the reports that eurozone officials are preparing individual plans for the aftermath of a Greek exit; even Lucas Papademos's statement last night that contingency plans are in place.		The main European markets are all down by 2.5% or more (FTSE 100 now down 138 points at 5264). Italy's stock market is down 4%.

Traders say there are seveal reasons to panic -- the Bundesbank's prediction that a Greek exit from the eurozone would not be a disaster; the reports that eurozone officials are preparing individual plans for the aftermath of a Greek exit; even Lucas Papademos's statement last night that contingency plans are in place.
So are Europe 'playing chicken' with Greece, and those parties who say the current financial programme must stop? Or are we really heading for a break-up....So are Europe 'playing chicken' with Greece, and those parties who say the current financial programme must stop? Or are we really heading for a break-up....
3.46pm: Our Europe editor, Ian Traynor, says the Bundesbank has made an "incendiary" contribution by stating today that a Greek exit would be 'manageable ' (see 3.30pm). The claim is"primed to explode in the heart of Brussels" as François Hollande prepares to debate with Chancellor Merkel tonight, he adds.3.46pm: Our Europe editor, Ian Traynor, says the Bundesbank has made an "incendiary" contribution by stating today that a Greek exit would be 'manageable ' (see 3.30pm). The claim is"primed to explode in the heart of Brussels" as François Hollande prepares to debate with Chancellor Merkel tonight, he adds.
The Bundesbank's central message is that if push comes to shove, a Grexit would be a better option than agreeing to the demands of, say, Alexis Tsipras, the Syriza leader who insists Greece must renegotiate its bailout.The Bundesbank's central message is that if push comes to shove, a Grexit would be a better option than agreeing to the demands of, say, Alexis Tsipras, the Syriza leader who insists Greece must renegotiate its bailout.
Ian explains:Ian explains:
The Bundesbank comes very close to proposing that it's too risky to send any more money to Greece and that allowing Athens to cheat on the terms would destroy the credibility of the eurozone system.The Bundesbank comes very close to proposing that it's too risky to send any more money to Greece and that allowing Athens to cheat on the terms would destroy the credibility of the eurozone system.
The stakes are being raised. the timing, hours before an EU summit opens in Brussels, is also interesting. this could also be a shot across the bows of the new French leader who is challenging German policies on the euro and on Greece.The stakes are being raised. the timing, hours before an EU summit opens in Brussels, is also interesting. this could also be a shot across the bows of the new French leader who is challenging German policies on the euro and on Greece.
3.30pm: Germany's Bundesbank has sparked fresh worries over Greece's eurozone future, by claiming than a Greek exit from the single currency would be "manageable".3.30pm: Germany's Bundesbank has sparked fresh worries over Greece's eurozone future, by claiming than a Greek exit from the single currency would be "manageable".
In a monthly report that has spooked investors, sending the euro tumbling as low as $1.2579 in the last few minutes, the German central bank urged European countries not to cave in over its austerity programme. That, the Bundesbank said, would "damage confidence in all euro area agreements".In a monthly report that has spooked investors, sending the euro tumbling as low as $1.2579 in the last few minutes, the German central bank urged European countries not to cave in over its austerity programme. That, the Bundesbank said, would "damage confidence in all euro area agreements".
The Bundesbank said:The Bundesbank said:

Greece is threatening not to implement the reform and consolidation measures that were agreed in return for the large-scale aid programmes.
Greece is threatening not to implement the reform and consolidation measures that were agreed in return for the large-scale aid programmes.
This jeopardises the continued provision of assistance. Greece would have to bear the consequences of such a scenario. The challenges this would create for the euro area and for Germany would be considerable but manageable given prudent crisis management.This jeopardises the continued provision of assistance. Greece would have to bear the consequences of such a scenario. The challenges this would create for the euro area and for Germany would be considerable but manageable given prudent crisis management.
There's more details of the Bundesbank's statement here.There's more details of the Bundesbank's statement here.
3.13pm: Greece's caretaker prime minister Panagiotis Pikramenos met with Herman Van Rompuy earlier today, and here's a picture -- tweeted by the President of the European Council himself (or perhaps an underling).3.13pm: Greece's caretaker prime minister Panagiotis Pikramenos met with Herman Van Rompuy earlier today, and here's a picture -- tweeted by the President of the European Council himself (or perhaps an underling).
Had a meeting with the Greek Prime Minister Panagiotis Pikrammenos in preparation of the discussion this evening. #euco twitter.com/euHvR/status/2…Had a meeting with the Greek Prime Minister Panagiotis Pikrammenos in preparation of the discussion this evening. #euco twitter.com/euHvR/status/2…
— Herman Van Rompuy (@euHvR) May 23, 2012— Herman Van Rompuy (@euHvR) May 23, 2012
Not clear what was discussed. As a high court judge, Pikramenos has limited experience of financial matters -- yesterday, one former government aide said he was "basically clueless about such issues". What can possibly go wrong?...Not clear what was discussed. As a high court judge, Pikramenos has limited experience of financial matters -- yesterday, one former government aide said he was "basically clueless about such issues". What can possibly go wrong?...
2.44pm: Wall Street is sharing in the global selloff, with the Dow Jones shedding another 80-odd points in early trading. Here's a round-up:

Dow Jones: down 80 points at 12428, - 0.6%
FTSE 100: down 95 points at 5308, - 1.75%
German DAX: down 105 points at 6329, - 1.64%
French CAC: down 61 points at 3022, -2.01%
Spanish IBEX: down 148 points at 6512, - 2.23%
Italian FTSE MIB: down 358 points at 13097, down 2.6%		2.44pm: Wall Street is sharing in the global selloff, with the Dow Jones shedding another 80-odd points in early trading. Here's a round-up:

Dow Jones: down 80 points at 12428, - 0.6%
FTSE 100: down 95 points at 5308, - 1.75%
German DAX: down 105 points at 6329, - 1.64%
French CAC: down 61 points at 3022, -2.01%
Spanish IBEX: down 148 points at 6512, - 2.23%
Italian FTSE MIB: down 358 points at 13097, down 2.6%
So Europe has lost all yesterday's gains. The heavy losses since mid-March has put the FTSE 100, for example, firmly in 'correction' territory.So Europe has lost all yesterday's gains. The heavy losses since mid-March has put the FTSE 100, for example, firmly in 'correction' territory.
2.22pm: The news that Germany sold €4.555bn worth of bonds with a zero coupon – meaning investors will not receive any interest payments during the life of the bonds – concerns some City experts.2.22pm: The news that Germany sold €4.555bn worth of bonds with a zero coupon – meaning investors will not receive any interest payments during the life of the bonds – concerns some City experts.
Eugene Philalithis, portfolio manager at Fidelity Multi Asset Income Fund, said the sale of 0.0% two-year bonds was a sign of the "massive dislocation we are seeing in Europe", adding:Eugene Philalithis, portfolio manager at Fidelity Multi Asset Income Fund, said the sale of 0.0% two-year bonds was a sign of the "massive dislocation we are seeing in Europe", adding:
The flight to quality trade continues in earnest, sucking assets out of the periphery into the safest havens.The flight to quality trade continues in earnest, sucking assets out of the periphery into the safest havens.
As blogged at 10.36am, Germany sold the bonds at record low yields - just 0.07%. That, as Dow Jones's Katie Martin rather wittily pointed out on Twitter, makes it a 'James Bond' #boomboomAs blogged at 10.36am, Germany sold the bonds at record low yields - just 0.07%. That, as Dow Jones's Katie Martin rather wittily pointed out on Twitter, makes it a 'James Bond' #boomboom
*German June 2014 Schatz Average Yield 0.07% [dj]>> boys and girls, it's a JAMES BOND!*German June 2014 Schatz Average Yield 0.07% [dj]>> boys and girls, it's a JAMES BOND!
— Katie Martin (@katie_martin_FX) May 23, 2012— Katie Martin (@katie_martin_FX) May 23, 2012
1.56pm: French president François Hollande has stated that he is "not aware" that eurozone officials agreed on Monday to work on contingency planning for a Greek exit.1.56pm: French president François Hollande has stated that he is "not aware" that eurozone officials agreed on Monday to work on contingency planning for a Greek exit.
Speaking in Paris, Hollande couldn't be lured into confirming Reuters' report a few minutes ago that plans were being drawn up. Instead, the new French leader focused on the progress he hopes to see tonight -- a European growth pact, more liquidity for the banking sector, and the early introduction of euro bonds.Speaking in Paris, Hollande couldn't be lured into confirming Reuters' report a few minutes ago that plans were being drawn up. Instead, the new French leader focused on the progress he hopes to see tonight -- a European growth pact, more liquidity for the banking sector, and the early introduction of euro bonds.
The top priority is injecting liquidity into the European financial system to ensure that European banks, all European banks, can be consolidated.The top priority is injecting liquidity into the European financial system to ensure that European banks, all European banks, can be consolidated.
Hollande was speaking after his meeting with Spanish prime minister Mariano Rajoy. Presumably the pair have agreed a line of attack to use on Angela Merkel tonight....Hollande was speaking after his meeting with Spanish prime minister Mariano Rajoy. Presumably the pair have agreed a line of attack to use on Angela Merkel tonight....
1.39pm: Alongside calling for individually tailored plans to handle a Grexit (see 1.15pm), Reuters is also reporting that eurozone officials have been working out the potential costs to individual member states:1.39pm: Alongside calling for individually tailored plans to handle a Grexit (see 1.15pm), Reuters is also reporting that eurozone officials have been working out the potential costs to individual member states:
The document detailed the potential costs to individual member states of a Greek exit and said that if it came about, an "amiable divorce" should be sought.The document detailed the potential costs to individual member states of a Greek exit and said that if it came about, an "amiable divorce" should be sought.
It also said that Greece decides to leave, support could be given from the EU/IMF to help it do so.It also said that Greece decides to leave, support could be given from the EU/IMF to help it do so.
That fits in with the way Roubini Global Economics sees a Greek exit panning out. It's Megan Greene has predicted that Greece's Troika of lenders would have to provide a bridging loan if the country did breach the terms of its aid package.That fits in with the way Roubini Global Economics sees a Greek exit panning out. It's Megan Greene has predicted that Greece's Troika of lenders would have to provide a bridging loan if the country did breach the terms of its aid package.
1.15pm: Breaking news on Reuters: it's reporting that eurozone governments were asked on Monday to prepare "individual contingency plans" for the possibility of Greece leaving the euro.1.15pm: Breaking news on Reuters: it's reporting that eurozone governments were asked on Monday to prepare "individual contingency plans" for the possibility of Greece leaving the euro.
Here's the details:Here's the details:
Each eurozone country should prepare a contingency plan, individually, for the potential consequences of a Greek exit from the euro," said one euro zone official familiar with what was discussion on the call.Each eurozone country should prepare a contingency plan, individually, for the potential consequences of a Greek exit from the euro," said one euro zone official familiar with what was discussion on the call.
"Nothing was prepared so far on the euro zone level for now, for fear of leaks," the official said."Nothing was prepared so far on the euro zone level for now, for fear of leaks," the official said.
The message, delivered on a teleconference by the Eurogroup Working Group, appears to be the clearest sign yet that contingency planning is underway (something David Cameron just recommended in parliament - curious timing!)The message, delivered on a teleconference by the Eurogroup Working Group, appears to be the clearest sign yet that contingency planning is underway (something David Cameron just recommended in parliament - curious timing!)
There's no immediate reaction in the financial markets, though.There's no immediate reaction in the financial markets, though.
12.56pm: Discussing the G8 summit in parliament, David Cameron told MPs that he believes Germany's approach to the crisis has evolved.12.56pm: Discussing the G8 summit in parliament, David Cameron told MPs that he believes Germany's approach to the crisis has evolved.
But while Berlin does better understand the need for growth measures, it is not ready to take its foot off the pedal of deficit reduction until closer fiscal union is agreed, the PM said.But while Berlin does better understand the need for growth measures, it is not ready to take its foot off the pedal of deficit reduction until closer fiscal union is agreed, the PM said.
Cameron also mentioned tonight's informal summit meeting, saying he would push issues such as the proposal for economic reform introduced by Mario Monti and himself last autumn, and the need to strengthen Europe's financial sector to get "all banks properly capitalised and properly working".Cameron also mentioned tonight's informal summit meeting, saying he would push issues such as the proposal for economic reform introduced by Mario Monti and himself last autumn, and the need to strengthen Europe's financial sector to get "all banks properly capitalised and properly working".
12.39pm: In the House of Commons, David Cameron has repeated his call for next month's Greek election to be treated as a referendum on its future in the eurozone.12.39pm: In the House of Commons, David Cameron has repeated his call for next month's Greek election to be treated as a referendum on its future in the eurozone.
Updating MPs about last weekend's G8 summit, Cameron said that while the future of Greece was a matter for Greeks alone, the question of its future in the eurozone cannot be "fudged or put off" anymore.Updating MPs about last weekend's G8 summit, Cameron said that while the future of Greece was a matter for Greeks alone, the question of its future in the eurozone cannot be "fudged or put off" anymore.
Instead, the June 17 election should be a treated as a referendum on Greece's eurozone membership, with voters choosing whether the country decides to stick with its commitments, or takes "a different path".Instead, the June 17 election should be a treated as a referendum on Greece's eurozone membership, with voters choosing whether the country decides to stick with its commitments, or takes "a different path".
Europe should draw up "contingency plans for both eventualities", Cameron added.Europe should draw up "contingency plans for both eventualities", Cameron added.
Update: Ed Miliband, leader of the opposition, responded to these comments by chiding the prime minister for speculating about the possible break-up of the eurozone.Update: Ed Miliband, leader of the opposition, responded to these comments by chiding the prime minister for speculating about the possible break-up of the eurozone.
My colleague Andrew Sparrow is reporting all the events in parliament in his Politics Live blog.My colleague Andrew Sparrow is reporting all the events in parliament in his Politics Live blog.
12.15pm: Ratings agency Fitch has warned today that non-resident investors have been pulling out of Spanish and Italian public debt in the last few months.12.15pm: Ratings agency Fitch has warned today that non-resident investors have been pulling out of Spanish and Italian public debt in the last few months.
"Cheap ECB money" replaced funding from international institutional investors in the first quarter of 2012, Fitch said, adding that it expects this trend to continue in the coming quarters."Cheap ECB money" replaced funding from international institutional investors in the first quarter of 2012, Fitch said, adding that it expects this trend to continue in the coming quarters.
Fitch sees a high risk of outflows in Spain and Italy continuing in the coming quarters until either a more stable base of foreign investors with higher risk appetite is reached, or economic prospects for Spain and Italy improve.Fitch sees a high risk of outflows in Spain and Italy continuing in the coming quarters until either a more stable base of foreign investors with higher risk appetite is reached, or economic prospects for Spain and Italy improve.
The change in the investor base follows a similar shift in Ireland, Portugal and Greece, the three eurozone programme countries, and reflects a broader investor aversion to the peripheral debt markets.The change in the investor base follows a similar shift in Ireland, Portugal and Greece, the three eurozone programme countries, and reflects a broader investor aversion to the peripheral debt markets.
More here.More here.
11.44am: Looking at the newspapers, Greece's Kathimerini reckons that a Greek exit from the euro would need to be squeezed into a 46-hour window.11.44am: Looking at the newspapers, Greece's Kathimerini reckons that a Greek exit from the euro would need to be squeezed into a 46-hour window.
That's how much time the country's leaders would probably have to enact any departure from the single currency while global markets are largely closed, from the end of trading in New York on a Friday to Monday's market opening in Wellington, New Zealand, based on a synthesis of euro-exit scenarios from 21 economists, analysts and academics.That's how much time the country's leaders would probably have to enact any departure from the single currency while global markets are largely closed, from the end of trading in New York on a Friday to Monday's market opening in Wellington, New Zealand, based on a synthesis of euro-exit scenarios from 21 economists, analysts and academics.
During this weekend, Greece would need to freeze bank accounts, put troops on the borders (to prevent a capital flight), and start stamping existing euros to work as a new currency while drachma are introduced. Greece's banks could well be shut down for several more days (I've read reports that they might be reopened on a Wednesday following a weekend default).During this weekend, Greece would need to freeze bank accounts, put troops on the borders (to prevent a capital flight), and start stamping existing euros to work as a new currency while drachma are introduced. Greece's banks could well be shut down for several more days (I've read reports that they might be reopened on a Wednesday following a weekend default).
11.23am: Luke Baker of Reuters points out that France and Germany have not held a pre-summit meeting ahead of tonight's talks, for the first time in over two years.11.23am: Luke Baker of Reuters points out that France and Germany have not held a pre-summit meeting ahead of tonight's talks, for the first time in over two years.
Since the euro crisis blew up, it has been common for Angela Merkel and Nicolas Sarkozy to speak, and sometimes draw up a cunning plan, to drop on their fellow leaders. Not this time, though, with François Hollande at the helm, in "a significant shift in the traditional Franco-German axis."Since the euro crisis blew up, it has been common for Angela Merkel and Nicolas Sarkozy to speak, and sometimes draw up a cunning plan, to drop on their fellow leaders. Not this time, though, with François Hollande at the helm, in "a significant shift in the traditional Franco-German axis."
Instead, new French President Francois Hollande will meet Spanish Prime Minister Mariano Rajoy in Paris to discuss policy, before the pair travel to Brussels for the 1800 GMT summit.Instead, new French President Francois Hollande will meet Spanish Prime Minister Mariano Rajoy in Paris to discuss policy, before the pair travel to Brussels for the 1800 GMT summit.
Despite fears that Greece could exit the currency bloc, Spain, where the economy is in recession and the banking system is in need of wholesale restructuring, is at the frontline of the crisis, with concerns that it could follow Greece, Ireland and Portugal in needing a bailout.Despite fears that Greece could exit the currency bloc, Spain, where the economy is in recession and the banking system is in need of wholesale restructuring, is at the frontline of the crisis, with concerns that it could follow Greece, Ireland and Portugal in needing a bailout.
Hollande's election victory has significantly changed the terms of the debate in Europe, with his call for greater emphasis on growth now a rallying cry for other leaders.Hollande's election victory has significantly changed the terms of the debate in Europe, with his call for greater emphasis on growth now a rallying cry for other leaders.
More here.More here.
11.10am: News in from Greece where our correspondent Helena Smith says the political establishment is hoping France's new president François Hollande will bat for them at tonight's informal EU Summit.

Helena writes:
11.10am: News in from Greece where our correspondent Helena Smith says the political establishment is hoping France's new president François Hollande will bat for them at tonight's informal EU Summit.

Helena writes:
The mass selling daily Ta Nea sums up the mood in Athens this morning: "The president of France is going to Brussels with Venizelos' proposals to change the terms of the memorandum," the paper proclaimed on its front page above a picture of the two men smiling and sharing a "warm" handshake.

Greek socialist leader Evangelos Venizelos held talks in Paris with Hollande on Tuesday after being unexpectedly called by the French president to brief him on the state of Greece's problem-plagued economy.		The mass selling daily Ta Nea sums up the mood in Athens this morning: "The president of France is going to Brussels with Venizelos' proposals to change the terms of the memorandum," the paper proclaimed on its front page above a picture of the two men smiling and sharing a "warm" handshake.

Greek socialist leader Evangelos Venizelos held talks in Paris with Hollande on Tuesday after being unexpectedly called by the French president to brief him on the state of Greece's problem-plagued economy.
A senior aide to Venizelos said the invitation was a total surprise but that when it did come the Greek politician jumped at it (even if he has lost two thirds of his Pasok party's parliamentary group since the May 6th poll).A senior aide to Venizelos said the invitation was a total surprise but that when it did come the Greek politician jumped at it (even if he has lost two thirds of his Pasok party's parliamentary group since the May 6th poll).
Hollande was described as "smart, warm, friendly, humble, the opposite of the impression you got from Sarkozy....He showed a very deep interest in Greece and wanted to know everything," said the source. "And he briefed us on the G20 and his experiences with president Obama."

Venizelos, who had openly supported Hollande's election, presented him with a six-point package of proposals aimed at stimulating growth in the debt-stricken country. The proposals, which range from ruling out further cuts to wages and pensions to combating youth unemployment by reinvigorating the European Social fund, amount to a revision of the controversial €130bn loan agreement Greece signed up to earlier this year with the EU and IMF (and which ironically Venizelos helped secure as finance minister).		Hollande was described as "smart, warm, friendly, humble, the opposite of the impression you got from Sarkozy....He showed a very deep interest in Greece and wanted to know everything," said the source. "And he briefed us on the G20 and his experiences with president Obama."

Venizelos, who had openly supported Hollande's election, presented him with a six-point package of proposals aimed at stimulating growth in the debt-stricken country. The proposals, which range from ruling out further cuts to wages and pensions to combating youth unemployment by reinvigorating the European Social fund, amount to a revision of the controversial €130bn loan agreement Greece signed up to earlier this year with the EU and IMF (and which ironically Venizelos helped secure as finance minister).
Venizelos, who subsequently travelled onto to Brussels by train, is due to present the proposals at a meeting of European Socialist party heads ahead of the informal EU summit at 2PM local time. Hollande is also expected to attend the meeting with insiders saying it is likely to evolve into a "big chin wag" on how development and growth can be expedited in Europe's vulnerable southern periphery.Venizelos, who subsequently travelled onto to Brussels by train, is due to present the proposals at a meeting of European Socialist party heads ahead of the informal EU summit at 2PM local time. Hollande is also expected to attend the meeting with insiders saying it is likely to evolve into a "big chin wag" on how development and growth can be expedited in Europe's vulnerable southern periphery.
Greece's conservative party leader Antonis Samaras, a long-time opponent of the fiscal remedies meted out to redress the country's financial woes, is also resting his hopes on Hollande. On Tuesday Samaras referred to him as "a politician whose views are so obviously in favour of our homeland."Greece's conservative party leader Antonis Samaras, a long-time opponent of the fiscal remedies meted out to redress the country's financial woes, is also resting his hopes on Hollande. On Tuesday Samaras referred to him as "a politician whose views are so obviously in favour of our homeland."
10.55am: Sweden's prime minister has just crushed any lingering thoughts that Europe might move towards eurobonds at this evening's meeting, dismissing them as a "bad idea".10.55am: Sweden's prime minister has just crushed any lingering thoughts that Europe might move towards eurobonds at this evening's meeting, dismissing them as a "bad idea".
Fredrik Reinfeldt told a parliamentary committee in Stockholm this morning that Sweden opposes collective borrowing, as it would mess up the debt markets (which are already in enough trouble, as this morning's German debt auction showed)Fredrik Reinfeldt told a parliamentary committee in Stockholm this morning that Sweden opposes collective borrowing, as it would mess up the debt markets (which are already in enough trouble, as this morning's German debt auction showed)
Reinfeldt added:Reinfeldt added:
It is a way to mess around with yields which is not good.It is a way to mess around with yields which is not good.
Although Sweden isn't a eurozone member, its opposition will surely make it easier for Angela Merkel to rebuff this particular proposal from François Hollande.Although Sweden isn't a eurozone member, its opposition will surely make it easier for Angela Merkel to rebuff this particular proposal from François Hollande.
10.36am: Germany has just managed to sell two year bonds at its lowest borrowing cost ever -- with a yield of just 0.07%.10.36am: Germany has just managed to sell two year bonds at its lowest borrowing cost ever -- with a yield of just 0.07%.
This morning's sale of two-year Schatz bonds proved popular with investors, even though the bonds won't pay a coupon (a regular payment). Investors snapped up €4.555bn of the bonds, at prices that mean they will have received just 0.07% per year when the money is repaid in 2014. That's down from 0.14% previously.This morning's sale of two-year Schatz bonds proved popular with investors, even though the bonds won't pay a coupon (a regular payment). Investors snapped up €4.555bn of the bonds, at prices that mean they will have received just 0.07% per year when the money is repaid in 2014. That's down from 0.14% previously.
Germany had offered €5bn of bonds, and could have sold the lot if it had accepted higher yields in return.Germany had offered €5bn of bonds, and could have sold the lot if it had accepted higher yields in return.
This is the first time that Germany has sold a 0.0% coupon* bond - it took the move after seeing record demand for its debt. This indicates that investors are prioritising capital safety at any price, rather than worrying about profitability.This is the first time that Germany has sold a 0.0% coupon* bond - it took the move after seeing record demand for its debt. This indicates that investors are prioritising capital safety at any price, rather than worrying about profitability.
Annalisa Piazza of Newedge said Lucas Papademos's comments overnight about preparations for Greece to leave the euro (later denied, see 8.12am), had made markets "extremely worried". Michael Leister of DZ Bank said "demand for safety is well intact" (quotes via Reuters).Annalisa Piazza of Newedge said Lucas Papademos's comments overnight about preparations for Greece to leave the euro (later denied, see 8.12am), had made markets "extremely worried". Michael Leister of DZ Bank said "demand for safety is well intact" (quotes via Reuters).
Sony Kapoor of the Re-Define think tank cautioned Germany against being too encouraged by the result:Sony Kapoor of the Re-Define think tank cautioned Germany against being too encouraged by the result:
Dear #Germany, the reason people are lending 2 you at -ve rates (2 year at 0.07%) is not becoz you are so great. DOn't let it get 2 ur head!Dear #Germany, the reason people are lending 2 you at -ve rates (2 year at 0.07%) is not becoz you are so great. DOn't let it get 2 ur head!
— Sony Kapoor (@SonyKapoor) May 23, 2012— Sony Kapoor (@SonyKapoor) May 23, 2012
* Technical point: Why is there any rate of return at all, if the coupon is zero? Because in today's auction, investors offered to pay various amounts for the bonds on offer (so Germany will get slightly less than the face value of the bonds)* Technical point: Why is there any rate of return at all, if the coupon is zero? Because in today's auction, investors offered to pay various amounts for the bonds on offer (so Germany will get slightly less than the face value of the bonds)
10.20am: The FTSE 100 just tumbled into a triple-digit loss, down 103 points at 5299, as pessimism abounds.10.20am: The FTSE 100 just tumbled into a triple-digit loss, down 103 points at 5299, as pessimism abounds.
Traders, rather like readers below the line*, are weary of the ongoing saga. Chris Beauchamp, market analyst at IG Index, sums the situation up well:Traders, rather like readers below the line*, are weary of the ongoing saga. Chris Beauchamp, market analyst at IG Index, sums the situation up well:
Today is the anniversary of the Defenestration of Prague in 1618, the start of the 30 Years' war. Frankly, it seems as if this crisis has been going on for 30 years.Today is the anniversary of the Defenestration of Prague in 1618, the start of the 30 Years' war. Frankly, it seems as if this crisis has been going on for 30 years.
Hopes for today's EU summit have been well and truly chucked out of the window, as the Germans once again state their firm opposition to eurozone bonds as a means of solving the crisis. Berlin has ignored the pleas of the OECD, IMF and its allies in Paris and Rome, believing that such a solution would only worsen the spendthrift ways of their southern neighbours.Hopes for today's EU summit have been well and truly chucked out of the window, as the Germans once again state their firm opposition to eurozone bonds as a means of solving the crisis. Berlin has ignored the pleas of the OECD, IMF and its allies in Paris and Rome, believing that such a solution would only worsen the spendthrift ways of their southern neighbours.
Chris is, of course, citing the second Defenestration of Prague, in 1618.Chris is, of course, citing the second Defenestration of Prague, in 1618.
As AussieAnalyst pointed out down under:As AussieAnalyst pointed out down under:
The markets are rather directionless at the moment, so emphasis should be on EU/EZ leaders to provide some input into the EZDC so markets can react against something solid.The markets are rather directionless at the moment, so emphasis should be on EU/EZ leaders to provide some input into the EZDC so markets can react against something solid.
So perhaps we'll get a rally tomorrow. Or perhaps not.So perhaps we'll get a rally tomorrow. Or perhaps not.
* - there's some jolly banter about vegetables among the analysis of bond yields, sovereign defaults and euro break-up. Makes me a bit homesick :(* - there's some jolly banter about vegetables among the analysis of bond yields, sovereign defaults and euro break-up. Makes me a bit homesick :(
9.55am: Back in the eurocrisis, and the boss of Unicredit, Italy's biggest bank by assets, has urged EU leaders to do everything possible to keep Greece within the euro.9.55am: Back in the eurocrisis, and the boss of Unicredit, Italy's biggest bank by assets, has urged EU leaders to do everything possible to keep Greece within the euro.
Federico Ghizzoni warned against thinking that a Grexit would be easily handled, saying it would actually "create volatility for sometime". Gzizzoni added:Federico Ghizzoni warned against thinking that a Grexit would be easily handled, saying it would actually "create volatility for sometime". Gzizzoni added:
I think the priority should be to keep Greece in the euro...Nobody knows what would happen if it were to leave.I think the priority should be to keep Greece in the euro...Nobody knows what would happen if it were to leave.
Seems sensible enough, given the warnings that a Greek exit would be more serious than Lehman Brothers. But some analysts have been speculating that the eurozone could come back stronger without its debt-laden partner -- much to the chagrin of certain experienced fund managers:Seems sensible enough, given the warnings that a Greek exit would be more serious than Lehman Brothers. But some analysts have been speculating that the eurozone could come back stronger without its debt-laden partner -- much to the chagrin of certain experienced fund managers:
I've stopped reading 'grexit could be a good thing' notes. Just grow the f*ck up.I've stopped reading 'grexit could be a good thing' notes. Just grow the f*ck up.
— P M (@Pawelmorski) May 23, 2012— P M (@Pawelmorski) May 23, 2012
9.38am: New sales figures from the British high street have dealt a blow to hopes that the UK economy is recovering.9.38am: New sales figures from the British high street have dealt a blow to hopes that the UK economy is recovering.
UK retail sales fell by 2.3% month-on-month in April, much worse than the 0.8% decline predicted by economists. That's partly due to a drop in fuel sales (after motorists rushed to fill up in late March after a brief panic over a truck drivers strike). On a year-on-year basis, sales were also disappointing - down by 1.1%, versus a forecast of an increase in 1%.UK retail sales fell by 2.3% month-on-month in April, much worse than the 0.8% decline predicted by economists. That's partly due to a drop in fuel sales (after motorists rushed to fill up in late March after a brief panic over a truck drivers strike). On a year-on-year basis, sales were also disappointing - down by 1.1%, versus a forecast of an increase in 1%.
So the UK consumer is reining in its spending, in the face of cutbacks and slowing economy at home and the euro crisis abroad. Not good. As Howard Archer of IHS Global Insight said:So the UK consumer is reining in its spending, in the face of cutbacks and slowing economy at home and the euro crisis abroad. Not good. As Howard Archer of IHS Global Insight said:
It is evident that there are currently a lot of pressures on consumers as they face uncertain and worrying times, so they seem likely to be cautious overall in their spending over the next few months at least.It is evident that there are currently a lot of pressures on consumers as they face uncertain and worrying times, so they seem likely to be cautious overall in their spending over the next few months at least.
9.32am: Breaking news from the Bank of England – the Monetary Policy Committee voted 8-1 against increasing quantitative easing again, at its meeting this month.9.32am: Breaking news from the Bank of England – the Monetary Policy Committee voted 8-1 against increasing quantitative easing again, at its meeting this month.
Minutes just released showed that David Miles was the only member of the MPC to vote for more electronic money. But for several other members, the decision was "finely balanced".Minutes just released showed that David Miles was the only member of the MPC to vote for more electronic money. But for several other members, the decision was "finely balanced".
The committee voted 9-0 to leave interest rates unchanged at 0.5%.The committee voted 9-0 to leave interest rates unchanged at 0.5%.
You can see the minutes here.You can see the minutes here.
9.29am: The euro selloff has continued - it just hit a new 21-month low of $1.2615 against the dollar.9.29am: The euro selloff has continued - it just hit a new 21-month low of $1.2615 against the dollar.
9.10am: AFP is predicting a 'no-holds barred' debate in Brussels today, when Angela Merkel and François Hollande tussle over how to develop measures to kickstart growth.9.10am: AFP is predicting a 'no-holds barred' debate in Brussels today, when Angela Merkel and François Hollande tussle over how to develop measures to kickstart growth.
There was one interesting development yesterday, when EU governments agreed to experiment with a new security called 'Project Bonds' -- commonly backed bonds that will fund pan-European infrastructure projects across borders.There was one interesting development yesterday, when EU governments agreed to experiment with a new security called 'Project Bonds' -- commonly backed bonds that will fund pan-European infrastructure projects across borders.
They are seen as a first step to full-blown eurobonds, and important because they will see European nations pay for work that will happen in another country - such as motorways, energy networks, and communications links.They are seen as a first step to full-blown eurobonds, and important because they will see European nations pay for work that will happen in another country - such as motorways, energy networks, and communications links.
But although "Project Bonds" are pooled borrowing, they are not mutually backed.But although "Project Bonds" are pooled borrowing, they are not mutually backed.
A 'high-ranking EU diplomat' told AFP that they're very different than Eurobonds, saying:A 'high-ranking EU diplomat' told AFP that they're very different than Eurobonds, saying:
Paris and Berlin understand each other completely: they're both called 'Bond', but these are very different animals.Paris and Berlin understand each other completely: they're both called 'Bond', but these are very different animals.
There's more on Project Bonds in the FT, and on CNBC.There's more on Project Bonds in the FT, and on CNBC.
8.50am: There were alarming scenes in Greece last night, where supporters of the neo-Nazi Golden Dawn party clashed with police during an anti-immigrant protest in the western port of Patras.8.50am: There were alarming scenes in Greece last night, where supporters of the neo-Nazi Golden Dawn party clashed with police during an anti-immigrant protest in the western port of Patras.
Reports from the scene stated that the incident began after a local man was fatally stabbed, allegedly by an illegal migrant from Afghanistan. As we reported overnight, an initially peaceful protest outside an old factory inhabited by migrants turned violent when Golden Dawn supporters arrived at the scene - resulting in Greek police protecting those in the factory and firing teargas after stones were thrown.Reports from the scene stated that the incident began after a local man was fatally stabbed, allegedly by an illegal migrant from Afghanistan. As we reported overnight, an initially peaceful protest outside an old factory inhabited by migrants turned violent when Golden Dawn supporters arrived at the scene - resulting in Greek police protecting those in the factory and firing teargas after stones were thrown.
It's a worrying sign of the escalating tensions in Greece, and the pressure on law on order. Golden Dawn, of course, won 21 seats in this month's election, on a virulently anti-immigrant campaign.It's a worrying sign of the escalating tensions in Greece, and the pressure on law on order. Golden Dawn, of course, won 21 seats in this month's election, on a virulently anti-immigrant campaign.
Theodora Oikonomides, who reported the clashes on Twitter last night, reports this morning that five people have been arrested.Theodora Oikonomides, who reported the clashes on Twitter last night, reports this morning that five people have been arrested.
#Patra yesterday: 5 arrests 22 detentions 8 cops wounded. Police says main violence came from 350 Golden Dawn activists #rbnews v @doleross#Patra yesterday: 5 arrests 22 detentions 8 cops wounded. Police says main violence came from 350 Golden Dawn activists #rbnews v @doleross
— Theodora Oikonomides (@IrateGreek) May 23, 2012— Theodora Oikonomides (@IrateGreek) May 23, 2012
8.41am: Analyst Gary Jenkins of Swordfish Research also isn't optimisic of much progress today, pointing out that the invitation letter from the EU President referred to "the longer term perspective".8.41am: Analyst Gary Jenkins of Swordfish Research also isn't optimisic of much progress today, pointing out that the invitation letter from the EU President referred to "the longer term perspective".
That means that the immediate crisis raging across Europe will only be raised at the end of the meeting, at the "coffee and mints stage of the evening".That means that the immediate crisis raging across Europe will only be raised at the end of the meeting, at the "coffee and mints stage of the evening".
Jenkins adds:Jenkins adds:
There is still a part of me that believes that somewhere in a dark corner of an office in Brussels a group of hyper intelligent EU officials are working on a contingency plan [in case Greece leaves the Eurozone and undertakes a disorderly default].There is still a part of me that believes that somewhere in a dark corner of an office in Brussels a group of hyper intelligent EU officials are working on a contingency plan [in case Greece leaves the Eurozone and undertakes a disorderly default].
8.36am: While Germany is unlikely to cave in to pressure over eurobonds today, Elisabeth Afseth of Investec reckon Berlin will eventually capitulate - and will look all the more daft when they do.8.36am: While Germany is unlikely to cave in to pressure over eurobonds today, Elisabeth Afseth of Investec reckon Berlin will eventually capitulate - and will look all the more daft when they do.
Germany risks appearing a bit like Jim Trott in the Vicar of Dibley, 'no, no, no, no, no…..yes'. It remains firmly against common bond issuance and measures to increase the lending power of the European Stability Mechanism (ESM) such as granting it a banking licence or lending directly to banks. All are likely proposal at today's leaders' meeting, and some way of boosting the firewall is required fairly soon. The OECD and the IMF both joined the chorus calling for greater fiscal liability-sharing yesterday. But the single currency probably has to be closer to the end of the cliff before Germany's 'no' turns to a 'yes'.Germany risks appearing a bit like Jim Trott in the Vicar of Dibley, 'no, no, no, no, no…..yes'. It remains firmly against common bond issuance and measures to increase the lending power of the European Stability Mechanism (ESM) such as granting it a banking licence or lending directly to banks. All are likely proposal at today's leaders' meeting, and some way of boosting the firewall is required fairly soon. The OECD and the IMF both joined the chorus calling for greater fiscal liability-sharing yesterday. But the single currency probably has to be closer to the end of the cliff before Germany's 'no' turns to a 'yes'.
[If the Vicar of Dibley has passed you by, this video explains all.][If the Vicar of Dibley has passed you by, this video explains all.]
Investec are hopeful, though, that EU leaders will agree on ways to use infrastructure spending to enhance growth.Investec are hopeful, though, that EU leaders will agree on ways to use infrastructure spending to enhance growth.
8.12am: Today's early selloff in the stock markets (see 8.08am) was triggered by an interview given by former Greek prime minister Lucas Papademos last night.8.12am: Today's early selloff in the stock markets (see 8.08am) was triggered by an interview given by former Greek prime minister Lucas Papademos last night.
Speaking to Dow Jones, Papademos appeared to warn that preparations for Greece to leave the eurozone are being drawn up. Here's the key quote from the story:Speaking to Dow Jones, Papademos appeared to warn that preparations for Greece to leave the eurozone are being drawn up. Here's the key quote from the story:
Although such a scenario is unlikely to materialize and it is not desirable either for Greece or for other countries, it can not be excluded that preparations are being made to contain the potential consequences of a Greek euro exit.Although such a scenario is unlikely to materialize and it is not desirable either for Greece or for other countries, it can not be excluded that preparations are being made to contain the potential consequences of a Greek euro exit.
This was enough to send the euro falling, and push the Dow Jones into negative territory (as Business Insider reported). But was it all a mistake? By 1am Greek time, Papademos was telling CNBC that there were no plans underway in Greece for a euro exit. Indeed, the former ECB vice-president was eager to sound reassuring, saying that "pressure on the banks has eased" in recent days.This was enough to send the euro falling, and push the Dow Jones into negative territory (as Business Insider reported). But was it all a mistake? By 1am Greek time, Papademos was telling CNBC that there were no plans underway in Greece for a euro exit. Indeed, the former ECB vice-president was eager to sound reassuring, saying that "pressure on the banks has eased" in recent days.
Still, the euro remains under pressure at $1.267 this morning - proof perhaps that it doesn't take much to alarm traders right now....Still, the euro remains under pressure at $1.267 this morning - proof perhaps that it doesn't take much to alarm traders right now....
8.08am: European markets have fallen sharply at the start of trading, as Tuesday's optimism vanishes.8.08am: European markets have fallen sharply at the start of trading, as Tuesday's optimism vanishes.
FTSE 100: down 64 points at 5338, - 1.2%
German DAX: - 1.3%
French CAC: - 1.2%
Spanish IBEX: down 97 points at 6560, -1.5%
Italian FTSE MIB: down 227 points at 13228, - 1.7%		FTSE 100: down 64 points at 5338, - 1.2%
German DAX: - 1.3%
French CAC: - 1.2%
Spanish IBEX: down 97 points at 6560, -1.5%
Italian FTSE MIB: down 227 points at 13228, - 1.7%
That follows a grim day in Asia, with Japan's Nikkei falling almost 2%.That follows a grim day in Asia, with Japan's Nikkei falling almost 2%.
Traders fear that today's EU summit will fail to make a significant leap forwards, which seems particularly likely as it's only an 'informal' summit.Traders fear that today's EU summit will fail to make a significant leap forwards, which seems particularly likely as it's only an 'informal' summit.
Michael Hewson of CMC Markets warned that share prices are likely to keep falling:Michael Hewson of CMC Markets warned that share prices are likely to keep falling:
Even though markets have rallied in the past couple day's further gains are likely to prove much more difficult especially given EU leaders track record for over promising and under delivering. The potential for disappointment therefore remains extremely high.Even though markets have rallied in the past couple day's further gains are likely to prove much more difficult especially given EU leaders track record for over promising and under delivering. The potential for disappointment therefore remains extremely high.
7.50am: Good morning, and welcome to our rolling coverage of the eurozone debt crisis.7.50am: Good morning, and welcome to our rolling coverage of the eurozone debt crisis.
Coming up today -- European leaders are heading to Brussels for an informal summit to discuss the financial crisis, and ways of boosting growth. Issues such as collective borrowing (eurobonds) and a beefed-up European firewall will be discussed, while the prospect of a Greek euro exit looms.Coming up today -- European leaders are heading to Brussels for an informal summit to discuss the financial crisis, and ways of boosting growth. Issues such as collective borrowing (eurobonds) and a beefed-up European firewall will be discussed, while the prospect of a Greek euro exit looms.
Analysts fear that the talks will not yield much progress, with François Hollande and Angela Merkel likely to disagree on the best way to tackle the crisis. Indeed, the euro is back below $1.27, and Asian markets have fallen overnight.Analysts fear that the talks will not yield much progress, with François Hollande and Angela Merkel likely to disagree on the best way to tackle the crisis. Indeed, the euro is back below $1.27, and Asian markets have fallen overnight.
Also on the agenda: the minutes of the Bank of England's last monetary policy meeting will be released at 9.30am, showing how many committee members voted for more quantitative easing.Also on the agenda: the minutes of the Bank of England's last monetary policy meeting will be released at 9.30am, showing how many committee members voted for more quantitative easing.
And Germany will sell €5bn of bonds with a zero coupon this morning – which means investors would not get any interest payments on the debt. As I blogged yesterday, analysts fear this shows the financial system may be drifting off the rails …And Germany will sell €5bn of bonds with a zero coupon this morning – which means investors would not get any interest payments on the debt. As I blogged yesterday, analysts fear this shows the financial system may be drifting off the rails …