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| Eurozone crisis live: Ireland votes on EU fiscal treaty | Eurozone crisis live: Ireland votes on EU fiscal treaty |
| (40 minutes later) | |
| 9.23am: Germany's unemployment rate has dropped again -- dipping to 6.7% in May, from 6.8% the previous month. | |
| But on a sesasonally adjusted basis, the number of people out of work was unchangerd at 2.872m, while economists had expected a drop of around 5,000. That suggests that the German employment market may be slowing down, after a decent run in recent months. | |
| Carsten Brzeski of ING warned that "signs are increasing that the German labour market is slowly cracking up". | |
| At 6.7%, the German unemployment rate is comfortably below the eurozone average of 10.9% (a 15-year high). | |
| 9.10am: In the bond markets, the yields* on French and Austrian 10-year bonds have both fallen to their lowest level since the euro was created. | |
| In the latest sign that investors are stashing their funds in safe European debt, the price of debt issued by France and Austra rallied this morning. This pushed the yield on France's 10-year bond down to just 2.379%, and the Austrian equivalent to 2.13%. | |
| In the European stock markets, shares have gained a little this morning. The FTSE 100 is up 45 points (+0.86%), and the Spanish IBEX has gained 1.2%. | |
| * - yields measure the rate of return on a bond, falling when the price rises and vice versa. So if a trader is prepared to pay more to hold a certain bond, s/he accepts a lower return. | |
| 8.57am: There have been signs of a certain degree of anti-German sentiment in Ireland in the run-up to today's referendum: | |
| This photo was taken outside Leinster House, where the Irish Parliament is based, on Wednesday. | |
| It's now 18 months since Ireland signed up for its highly unpopular €85bn bailout plan, which forces hefty cuts to government spending and a raft of tax rises. The most unpopular issue, though, is that Ireland took the debts of its failing banks on to the public books. That decision helped prevent the contagion hitting other financial institutions across Europe, but in return Ireland is left paying off €31bn of promissory notes at high interest rates. | |
| 8.40am: We've just launched this Q&A explaining how the Irish referendum works. | 8.40am: We've just launched this Q&A explaining how the Irish referendum works. |
| 8.32am: Polling data in the run-up to today's vote suggested that the Yes camp will win. But there are no guarantees. | 8.32am: Polling data in the run-up to today's vote suggested that the Yes camp will win. But there are no guarantees. |
| As the BBC explains: | As the BBC explains: |
| The nightmare scenario for the government is that people wake up on Thursday morning and decide to give ministers a bloody nose by voting 'no' in the referendum. | The nightmare scenario for the government is that people wake up on Thursday morning and decide to give ministers a bloody nose by voting 'no' in the referendum. |
| After four years of austerity measures, some anti-treaty campaigners are predicting the "revenge of the people". | After four years of austerity measures, some anti-treaty campaigners are predicting the "revenge of the people". |
| Four opinion polls released over the weekend indicated that around 60% of voters would back the treaty. But a significant number of people have been classed as 'don't knows' in the run-up to today's vote. | Four opinion polls released over the weekend indicated that around 60% of voters would back the treaty. But a significant number of people have been classed as 'don't knows' in the run-up to today's vote. |
| The BBC also says that some 'yes' campaigners reckon the gap could be as close as 53-47. A sign of nerves, or an attempt to encourage Yes voters to the polls? | The BBC also says that some 'yes' campaigners reckon the gap could be as close as 53-47. A sign of nerves, or an attempt to encourage Yes voters to the polls? |
| 8.28am: Last night, Irish prime minister Enda Kenny urged the Irish people to vote Yes in today's referendum on the fiscal compact. He claimed that the country's borrowing costs would leap to dangerous levels if it did not have the protection of the European Stability Mechanism. | 8.28am: Last night, Irish prime minister Enda Kenny urged the Irish people to vote Yes in today's referendum on the fiscal compact. He claimed that the country's borrowing costs would leap to dangerous levels if it did not have the protection of the European Stability Mechanism. |
| Taoiseach Kenny said: | Taoiseach Kenny said: |
| Countries that ratify this have access to the ESM, countries that don't won't and the difference between 3% and 7%, or even 8% or 9%, is enormous in the context of availability of funding, were that ever to be necessary. | Countries that ratify this have access to the ESM, countries that don't won't and the difference between 3% and 7%, or even 8% or 9%, is enormous in the context of availability of funding, were that ever to be necessary. |
Ireland's 10-year bond are trading at a yield of 7.4% this morning. That's a higher rate than a country can reasonably borrow at, but not so high that investors have given up on the country (whose borrowing needs are covered until the end of 2013 by its current bailout) | Ireland's 10-year bond are trading at a yield of 7.4% this morning. That's a higher rate than a country can reasonably borrow at, but not so high that investors have given up on the country (whose borrowing needs are covered until the end of 2013 by its current bailout) |
| The No campaign, though, takes a very different view. It argues that rejecting the Treaty will give Ireland the authority to go back to the rest of Europe and demand a better bailout plan. | The No campaign, though, takes a very different view. It argues that rejecting the Treaty will give Ireland the authority to go back to the rest of Europe and demand a better bailout plan. |
| Sinn Féin president Gerry Adams argued that voting No was the "patriotic thing to do": | Sinn Féin president Gerry Adams argued that voting No was the "patriotic thing to do": |
| I ask Irish citizens not to be bullied, not to give their democratic rights away, not to give up their say over Irish economic policy and not to write austerity into the Constitution. | I ask Irish citizens not to be bullied, not to give their democratic rights away, not to give up their say over Irish economic policy and not to write austerity into the Constitution. |
| 8.08am: Irish voters face an unenviable choice today. The EU fiscal compact will force member states to hit tough budget targets, which would mean more short-term pain for a country that is already deep into its austerity programme. | 8.08am: Irish voters face an unenviable choice today. The EU fiscal compact will force member states to hit tough budget targets, which would mean more short-term pain for a country that is already deep into its austerity programme. |
| But the fiscal compact will also guarantee access to the European Stability Mechanism, Europe's new bailout fund – a financial lifeline to countries who cannot borrow in the debt markets. | But the fiscal compact will also guarantee access to the European Stability Mechanism, Europe's new bailout fund – a financial lifeline to countries who cannot borrow in the debt markets. |
| Our leader article argues today that the pact is "an unroadworthy vehicle going the wrong way": | Our leader article argues today that the pact is "an unroadworthy vehicle going the wrong way": |
| It's lethal not only for its occupants but other road users, it's got an oil leak and probably no brakes. Would you hitch a ride in one, if it lurched to a halt in front of you? | It's lethal not only for its occupants but other road users, it's got an oil leak and probably no brakes. Would you hitch a ride in one, if it lurched to a halt in front of you? |
| But with no guarantee that Ireland can return to the financial markets as soon as planned, refusing a lift could be a gamble. Ultimately, it's a choice between fear and anger: | But with no guarantee that Ireland can return to the financial markets as soon as planned, refusing a lift could be a gamble. Ultimately, it's a choice between fear and anger: |
Fear might well win the day in Ireland: no one knows whether a Greek exit would be a blip on the screens or another Lehman Brothers. But if the firewalls are not as thick as they are cracked up to be, would Ireland be the next point of contagion? The Germans need to get a signal, but would your economy be the one wanting to send it ? It's hardly a great choice. | Fear might well win the day in Ireland: no one knows whether a Greek exit would be a blip on the screens or another Lehman Brothers. But if the firewalls are not as thick as they are cracked up to be, would Ireland be the next point of contagion? The Germans need to get a signal, but would your economy be the one wanting to send it ? It's hardly a great choice. |
| 7.55am: Here's a quick agenda of some of the main events happening today: | 7.55am: Here's a quick agenda of some of the main events happening today: |
| • Irish referendum: all day, polls close at 10pm • German unemployment data: 8.55am • Eurozone inflation for May: 10am • US Q1 GDP, second revision: 1.30pm • Brussels Economic Forum: all day (including Olli Rehn and Mario Monti). | • Irish referendum: all day, polls close at 10pm • German unemployment data: 8.55am • Eurozone inflation for May: 10am • US Q1 GDP, second revision: 1.30pm • Brussels Economic Forum: all day (including Olli Rehn and Mario Monti). |
| India, Switzerland, the Philippines and Denmark are all releasing (or have already released) GDP data, so we'll keep an eye on the reaction to that data, for a more global economic perspective. | India, Switzerland, the Philippines and Denmark are all releasing (or have already released) GDP data, so we'll keep an eye on the reaction to that data, for a more global economic perspective. |
| 7.45am: Good morning, and welcome to our rolling coverage of the eurozone financial crisis. | 7.45am: Good morning, and welcome to our rolling coverage of the eurozone financial crisis. |
| Ireland is the centre of attention today, as it holds its referendum on whether to ratify the fiscal compact. Polls have just opened across the country, and our Dublin correspondent Henry McDonald will be following all the action throughout the day. The results itself will be released on Friday. | Ireland is the centre of attention today, as it holds its referendum on whether to ratify the fiscal compact. Polls have just opened across the country, and our Dublin correspondent Henry McDonald will be following all the action throughout the day. The results itself will be released on Friday. |
| Elsewhere, Spain is still a major concern. The crisis over its banking sector continues, there is still no clear plan for recapitalising Bankia, and its bond yields are still dangerousy high. | Elsewhere, Spain is still a major concern. The crisis over its banking sector continues, there is still no clear plan for recapitalising Bankia, and its bond yields are still dangerousy high. |
| We'll also be tracking the reaction to yesterday's EU report cards on the European economy, which included a call for closer banking union, and warnings that France and Spain need to do more to bring their deficits down (although Spain may be given more time). | |
| There's also a lot of economic data being released today, including German unemployment, eurozone inflation, French and German retail figures, and another estimate of US GDP. Busy busy | There's also a lot of economic data being released today, including German unemployment, eurozone inflation, French and German retail figures, and another estimate of US GDP. Busy busy |