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| Eurozone crisis live: Germany outnumbered as leaders meet in Rome | Eurozone crisis live: Germany outnumbered as leaders meet in Rome |
| (31 minutes later) | |
| 10.42am: Germany faces a delay to ratifying the ESM permanent bailout fund, Der Spiegel reports. (Thanks to readers AloisiusH and Continent for the heads up). Severin Weiland and Annett Meiritz write: | |
| Germany's highest court asked the country's president on Thursday to delay ratification of the permanent euro bailout fund, the European Stability Mechanism, and the fiscal pact into law next week. If he complies, the move could delay the implementation of the ESM by several weeks in the latest setback for Chancellor Angela Merkel. | |
| The ESM was originally scheduled to come into force on July 1, 2012. | |
| 10.39am: We're not expecting any agreements out of the meeting between Monti, Merkel, Rajoy and Hollande later today, apparently. The Bloomberg economics editor writes: | |
| German gov spokesman Streiter says no agreements to be made at Rome meeting today among German, France, Italy, Spain leaders | |
| — Linda Yueh (@lindayueh) June 22, 2012 | |
| 10.06am: And over to Rome, where our correspondent John Hooper reports on the upcoming meeting between Monti, Merkel, Hollande and Rajoy. | 10.06am: And over to Rome, where our correspondent John Hooper reports on the upcoming meeting between Monti, Merkel, Hollande and Rajoy. |
| The leaders of the eurozone's four biggest economies were this morning flying to Rome to try to agree a common position ahead of next week's crucial EU summit flagged by Italy's prime minister, Mario Monti, as the last chance to save the Union from a lethal downward spiral of recession and anti-European populism. | The leaders of the eurozone's four biggest economies were this morning flying to Rome to try to agree a common position ahead of next week's crucial EU summit flagged by Italy's prime minister, Mario Monti, as the last chance to save the Union from a lethal downward spiral of recession and anti-European populism. |
| According to an unsourced report in the Italian daily La Repubblica, Monti will also warn the German chancellor, Angela Merkel, that his euro-friendly government will fall if the summit fails to achieve substantial results. | According to an unsourced report in the Italian daily La Repubblica, Monti will also warn the German chancellor, Angela Merkel, that his euro-friendly government will fall if the summit fails to achieve substantial results. |
| Silvio Berlusconi, his predecessor in office and still the moving force behind a party with the firepower to kill off Monti's government in parliament, this week hinted for the first time in public that he was considering withdrawing his support. A cartoon on the front page of another Italian paper, Corriere della Sera, showed the TV magnate and conservative leader climbing out of the euro down a sheet made of ropes. | Silvio Berlusconi, his predecessor in office and still the moving force behind a party with the firepower to kill off Monti's government in parliament, this week hinted for the first time in public that he was considering withdrawing his support. A cartoon on the front page of another Italian paper, Corriere della Sera, showed the TV magnate and conservative leader climbing out of the euro down a sheet made of ropes. |
| On the table at today's meeting will be a plan to link the purchasing of the bonds issued by states under attack in the markets to their compliance with EU objectives. In an interview with the Guardian and other leading European newspapers on Thursday, Monti described it as a "market-friendly policy mechanism" that would tie intervention to a state's performance in areas such as budget discipline and root-and-branch economic reform. | On the table at today's meeting will be a plan to link the purchasing of the bonds issued by states under attack in the markets to their compliance with EU objectives. In an interview with the Guardian and other leading European newspapers on Thursday, Monti described it as a "market-friendly policy mechanism" that would tie intervention to a state's performance in areas such as budget discipline and root-and-branch economic reform. |
| He offered few details, but said the plan being discussed among Europe's capitals was also aimed at slicing through the vicious circle created by the current system of bailing out banks by means of funds provided to states. That, said Monti, only led to an increase in the state's debts that raised the yields and cut the value of its government bonds. That in turn weakened the finances of the banks whose balance sheets were packed with the bonds. | He offered few details, but said the plan being discussed among Europe's capitals was also aimed at slicing through the vicious circle created by the current system of bailing out banks by means of funds provided to states. That, said Monti, only led to an increase in the state's debts that raised the yields and cut the value of its government bonds. That in turn weakened the finances of the banks whose balance sheets were packed with the bonds. |
| "The present mechanism means that, two birds are killed every time you throw a stone, when in fact you only seek to hit one," he said. The plan was given swift backing today by the IMF chief, Christine Lagarde. She urged eurozone leaders to channel aid directly to struggling banks rather than via governments. | "The present mechanism means that, two birds are killed every time you throw a stone, when in fact you only seek to hit one," he said. The plan was given swift backing today by the IMF chief, Christine Lagarde. She urged eurozone leaders to channel aid directly to struggling banks rather than via governments. |
| A plan for the reward of virtue might go some way towards meeting the demands of Germany where, as Monti has more than once remarked, economics is seen as a branch of moral philosophy. But Nicholas Spiro, the head of Spiro Sovereign Strategy, warned: "Italy must tread very carefully. It cannot afford to be seen to be entering into a quasi-bail-out programme. There is already enough conditionality creep' in Spain at the moment. The key for Mr Monti, not least given his increasingly weak political position, is to try to differentiate Italy as much as possible from Spain." | A plan for the reward of virtue might go some way towards meeting the demands of Germany where, as Monti has more than once remarked, economics is seen as a branch of moral philosophy. But Nicholas Spiro, the head of Spiro Sovereign Strategy, warned: "Italy must tread very carefully. It cannot afford to be seen to be entering into a quasi-bail-out programme. There is already enough conditionality creep' in Spain at the moment. The key for Mr Monti, not least given his increasingly weak political position, is to try to differentiate Italy as much as possible from Spain." |
| Monti's guests, who also include France's president, Francois Hollande and Spain's prime minister, Mariano Rajoy, will meet as pressure builds, not only on Italy, but Germany too. Today's IFO business climate index showed tmorale among German executives at its lowest level in more than two years. | Monti's guests, who also include France's president, Francois Hollande and Spain's prime minister, Mariano Rajoy, will meet as pressure builds, not only on Italy, but Germany too. Today's IFO business climate index showed tmorale among German executives at its lowest level in more than two years. |
| 9.57am: Over to Madrid, where our correspondent Giles Tremlett reports: | 9.57am: Over to Madrid, where our correspondent Giles Tremlett reports: |
| Spanish finance minister Luis de Guindos has said this morning that he will be sending the letter in which Spain formally asks for up to €100bn from Europe's bailout fund as soon as he arrives back in Madrid today. | Spanish finance minister Luis de Guindos has said this morning that he will be sending the letter in which Spain formally asks for up to €100bn from Europe's bailout fund as soon as he arrives back in Madrid today. |
| The pledge comes amid complaints of Spanish foot-dragging and clear impatience from other eurozone countries as Spain tries to win time to improve its negotiating position. | The pledge comes amid complaints of Spanish foot-dragging and clear impatience from other eurozone countries as Spain tries to win time to improve its negotiating position. |
| The two independent valuations of Spain's bank assets made public yesterday suggest that they need no more than €62bn, but Spain may add a safety cushion to that. | The two independent valuations of Spain's bank assets made public yesterday suggest that they need no more than €62bn, but Spain may add a safety cushion to that. |
| De Guindos has been meeting fellow eurozone finance ministers – the so-called Eurogroup – in Luxembourg. The group's president, Jean-Claude Juncker of Luxembourg, said they expected a Spanish request by Monday. The temporary EFSF bailout fund will provide the money, with the permanent ESM fund taking over in July. Full details of the terms and conditions will have to wait until the next Eurogroup meeting on July 9. | De Guindos has been meeting fellow eurozone finance ministers – the so-called Eurogroup – in Luxembourg. The group's president, Jean-Claude Juncker of Luxembourg, said they expected a Spanish request by Monday. The temporary EFSF bailout fund will provide the money, with the permanent ESM fund taking over in July. Full details of the terms and conditions will have to wait until the next Eurogroup meeting on July 9. |
| 9.52am: Back to the football... Steve Collins from London & Capital Asset Management has a look at the possible outcomes of the quarter-finals from the point of view of the ratings agencies. | 9.52am: Back to the football... Steve Collins from London & Capital Asset Management has a look at the possible outcomes of the quarter-finals from the point of view of the ratings agencies. |
| If we go by credit rating in the next three football games then Germany,France and England will win!!! | If we go by credit rating in the next three football games then Germany,France and England will win!!! |
| — Steve Collins (@TradeDesk_Steve) June 22, 2012 | — Steve Collins (@TradeDesk_Steve) June 22, 2012 |
| 9.44am: My colleague Julia Kollewe has more on the IMF report on the eurozone that came out over night. She writes: | 9.44am: My colleague Julia Kollewe has more on the IMF report on the eurozone that came out over night. She writes: |
| IMF managing director Christine Lagarde ... urged the 17 eurozone countries to consider jointly issuing debt, helping troubled banks directly, and suggested relaxing the strict austerity conditions imposed on countries that have received bailouts. | IMF managing director Christine Lagarde ... urged the 17 eurozone countries to consider jointly issuing debt, helping troubled banks directly, and suggested relaxing the strict austerity conditions imposed on countries that have received bailouts. |
| "We are clearly seeing additional tension and acute stress applying to both banks and sovereigns in the euro area," Lagarde said after the meeting in Luxembourg. | "We are clearly seeing additional tension and acute stress applying to both banks and sovereigns in the euro area," Lagarde said after the meeting in Luxembourg. |
| "A determined and forceful move towards complete European monetary union should be reaffirmed in order to restore faith," she said. "At the moment, the viability of the European monetary system is questioned." | "A determined and forceful move towards complete European monetary union should be reaffirmed in order to restore faith," she said. "At the moment, the viability of the European monetary system is questioned." |
| Asked what Germany would think of her suggestions, she smiled and said: "We hope wisdom will prevail." | Asked what Germany would think of her suggestions, she smiled and said: "We hope wisdom will prevail." |
| 9.28am: Italian consumer confidence to its lowest level on record in June. The national statistics office said the consumer confidence index dropped from 86.5 in May to 85.3, the lowest since the series began in January 1996. | 9.28am: Italian consumer confidence to its lowest level on record in June. The national statistics office said the consumer confidence index dropped from 86.5 in May to 85.3, the lowest since the series began in January 1996. |
| Italy is mired in recession, taxes are rising and wages are stagnant. The unemployment rate was also worryingly high at 10.2% in April, its highest level ever. | Italy is mired in recession, taxes are rising and wages are stagnant. The unemployment rate was also worryingly high at 10.2% in April, its highest level ever. |
| There was a large gain in expectations of higher unemployment in today's survey, with the index climbing to 121 from 114. A spokesman for the statistics agency said: | There was a large gain in expectations of higher unemployment in today's survey, with the index climbing to 121 from 114. A spokesman for the statistics agency said: |
| What is hitting confidence is a worsening scenario with a pessimistic future, while consumers are not alarmed by the present What is a worry is unemployment. | What is hitting confidence is a worsening scenario with a pessimistic future, while consumers are not alarmed by the present What is a worry is unemployment. |
| 9.23am: Sticking with Germany, Christian Schulz of Berenberg has the following on the IFO business confidence survey (see 9.05am): | 9.23am: Sticking with Germany, Christian Schulz of Berenberg has the following on the IFO business confidence survey (see 9.05am): |
| The picture in June was mixed across sectors. Manufacturing was hit by a deterioration of the export outlook, a clear indication that companies feel the impact of the euro crisis elsewhere. The most domestically-oriented sectors, retail trade and construction, reported a slightly improving business climate, while the indicator declined for wholesale trade and services. Investment and exports are likely to be the main channels of transmission of financial market turbulences to the Germany's real economy, as the crisis hits again and is likely to trigger a significant slowdown over the summer. Domestic private and public consumption, on the other hand are likely to have a stabilising effect. With unemployment remaining at very low levels and wages rising, households benefit from lower energy costs. The key for the economic outlook is the management of the euro crisis, as it was last year. Based on very sound economic fundamentals, the German economy can start expanding at trend growth rates again once this wave of the euro crisis is brought under control, as it did in Q1 2012 after ECB and EU action in December. | The picture in June was mixed across sectors. Manufacturing was hit by a deterioration of the export outlook, a clear indication that companies feel the impact of the euro crisis elsewhere. The most domestically-oriented sectors, retail trade and construction, reported a slightly improving business climate, while the indicator declined for wholesale trade and services. Investment and exports are likely to be the main channels of transmission of financial market turbulences to the Germany's real economy, as the crisis hits again and is likely to trigger a significant slowdown over the summer. Domestic private and public consumption, on the other hand are likely to have a stabilising effect. With unemployment remaining at very low levels and wages rising, households benefit from lower energy costs. The key for the economic outlook is the management of the euro crisis, as it was last year. Based on very sound economic fundamentals, the German economy can start expanding at trend growth rates again once this wave of the euro crisis is brought under control, as it did in Q1 2012 after ECB and EU action in December. |
| 9.13am: But will German morale be restored after tonight's politically-charged football match against Greece? Angela Merkel will be attend the quarter-final match but will she get to jump for joy as she did at the World Cup in 2010? | 9.13am: But will German morale be restored after tonight's politically-charged football match against Greece? Angela Merkel will be attend the quarter-final match but will she get to jump for joy as she did at the World Cup in 2010? |
| She does apparently have a good relationship with German manager Joachim Low. My colleagues over on the football live blog wrote earlier this week: | She does apparently have a good relationship with German manager Joachim Low. My colleagues over on the football live blog wrote earlier this week: |
| And they say Germans have no sense of humour. "Angela Merkel and us, we have a good relationship and an agreement that she does not advise me on the lineups and I do not advise her on political statements," deadpanned Joachim Low. "It is just a normal quarter-final game against Greece and nothing else." Bet she makes him pick Schweinsteiger though. | And they say Germans have no sense of humour. "Angela Merkel and us, we have a good relationship and an agreement that she does not advise me on the lineups and I do not advise her on political statements," deadpanned Joachim Low. "It is just a normal quarter-final game against Greece and nothing else." Bet she makes him pick Schweinsteiger though. |
| 9.10am: The IFO index (see 9.05am) shows that German business morale is now at its lowest level in over two years, as Europe's largest economy is buffeted by the debt crisis. | 9.10am: The IFO index (see 9.05am) shows that German business morale is now at its lowest level in over two years, as Europe's largest economy is buffeted by the debt crisis. |
| 9.05am: The German IFO business climate index dropped in June to 105.3, compared with forecasts of a reading of 105.9. But the reading for current conditions was slightly ahead of forecasts at 113.9, comapred with expectations of 112.3. | 9.05am: The German IFO business climate index dropped in June to 105.3, compared with forecasts of a reading of 105.9. But the reading for current conditions was slightly ahead of forecasts at 113.9, comapred with expectations of 112.3. |
| 8.51am: Sticking with the debt markets, the yield on Spain's 10-year bond – effectively the interest rate – is looking devilish at 6.66%, and Italy's 10-year bond is yielding 5.82%. Gary Jenkins said about Spanish bonds: | 8.51am: Sticking with the debt markets, the yield on Spain's 10-year bond – effectively the interest rate – is looking devilish at 6.66%, and Italy's 10-year bond is yielding 5.82%. Gary Jenkins said about Spanish bonds: |
| Alas one fears that the recent fall in yields is all to do with a bit of short covering / index adjusting ahead of some potential outside help. If the help does not come then yields will probably start to rise again soon. There may have been some relief that the Spanish bond auctions actually managed to raise the money targeted but they were fairly small, shorter dated bonds and paying over 6% for 5 year money is not sustainable. | Alas one fears that the recent fall in yields is all to do with a bit of short covering / index adjusting ahead of some potential outside help. If the help does not come then yields will probably start to rise again soon. There may have been some relief that the Spanish bond auctions actually managed to raise the money targeted but they were fairly small, shorter dated bonds and paying over 6% for 5 year money is not sustainable. |
| The yield on Portugal's 10-year bond is hovering around the 10% mark, currently at 10.09% (according to Tradeweb data). The global head of dealing at London & Capital Asset Management notes that it even dipped below the 10% mark earlier today, possibly lifted by last night's football result. | The yield on Portugal's 10-year bond is hovering around the 10% mark, currently at 10.09% (according to Tradeweb data). The global head of dealing at London & Capital Asset Management notes that it even dipped below the 10% mark earlier today, possibly lifted by last night's football result. |
| @TradeDesk_Steve writes: Following Ronaldo's goal last night...the 10 yr has fallen below the 10% - first time since June last year.... | @TradeDesk_Steve writes: Following Ronaldo's goal last night...the 10 yr has fallen below the 10% - first time since June last year.... |
| 8.39am: In the debt markets, investors are still trying to get to grips with the implications of the Spanish banking bailout. Yesterday's announcement that the banks would need between €51bn and €62bn was a relief, as it stuck within the previously announced €100bn limit. | 8.39am: In the debt markets, investors are still trying to get to grips with the implications of the Spanish banking bailout. Yesterday's announcement that the banks would need between €51bn and €62bn was a relief, as it stuck within the previously announced €100bn limit. |
| But it is still not clear whether the bailout will push other investors in Spanish bonds further down the pecking order in the case of a default. Christian Schulz, economist at Berenberg Bank, writes: | But it is still not clear whether the bailout will push other investors in Spanish bonds further down the pecking order in the case of a default. Christian Schulz, economist at Berenberg Bank, writes: |
| A direct recapitalisation of Spanish banks via Europe's rescue funds is off the table, the Spanish government's FROB [The Fund for Orderly Bank Restructuring] will receive the funds. The loans become part of Spanish government debt. If and when a European banking union with European supervision, resolution and deposit insurance has been established in the future, it might be possible to bail-out banks directly and break the link between bank and sovereign debt. But the Eurozone is not there yet. | A direct recapitalisation of Spanish banks via Europe's rescue funds is off the table, the Spanish government's FROB [The Fund for Orderly Bank Restructuring] will receive the funds. The loans become part of Spanish government debt. If and when a European banking union with European supervision, resolution and deposit insurance has been established in the future, it might be possible to bail-out banks directly and break the link between bank and sovereign debt. But the Eurozone is not there yet. |
| Whether official European aid for Spain will obtain a senior creditor status over existing Spanish debt remains open. At the Eurogroup finance minister meeting, ministers agreed that the temporary EFSF [bailout fund] would initially provide the funds, but the ESM [the permanent bailout fund] would take over once operational in July. The EFSF has no legal basis to obtain seniority, the ESM does. As we expected, finance ministers seem to have been unable to resolve the issue and left it to the 28-29 EU summit. | Whether official European aid for Spain will obtain a senior creditor status over existing Spanish debt remains open. At the Eurogroup finance minister meeting, ministers agreed that the temporary EFSF [bailout fund] would initially provide the funds, but the ESM [the permanent bailout fund] would take over once operational in July. The EFSF has no legal basis to obtain seniority, the ESM does. As we expected, finance ministers seem to have been unable to resolve the issue and left it to the 28-29 EU summit. |
| 8.25am: Commodities have been hit by growing fears of a global economic slowdown, with gold heading for its biggest weekly loss since December, and brent crude set for its worst week in a year. | 8.25am: Commodities have been hit by growing fears of a global economic slowdown, with gold heading for its biggest weekly loss since December, and brent crude set for its worst week in a year. |
| Gold has lost some of its appeal as a supposed safe-have, after investors started cashing in bullion to cover losses caused by the ongoing market turmoil. It dropped 2.5% yesterday on disappointment that the Fed did not launch another round of quantitative easing and is down again today. | Gold has lost some of its appeal as a supposed safe-have, after investors started cashing in bullion to cover losses caused by the ongoing market turmoil. It dropped 2.5% yesterday on disappointment that the Fed did not launch another round of quantitative easing and is down again today. |
| Brent crude is hovering below $90 a barrel after bleak economic data out of the US and China, the world's top consumers of oil. US factory output grew at its slowest pace in 11 months in June, while Chinese manufacturing contracted for an eighth month running. | Brent crude is hovering below $90 a barrel after bleak economic data out of the US and China, the world's top consumers of oil. US factory output grew at its slowest pace in 11 months in June, while Chinese manufacturing contracted for an eighth month running. |
| 8.16am: Quick look at the markets, which have opened lower, weighed down by Moody's rating downgrades. | 8.16am: Quick look at the markets, which have opened lower, weighed down by Moody's rating downgrades. |
| UK FTSE 100: down 0.8%, or 44 points, at 5523 France CAC 40: down 0.9% Germany DAX: down 1.1% Spain IBEX: down 1.1% Italy FTSE MIB: down 1.1% | UK FTSE 100: down 0.8%, or 44 points, at 5523 France CAC 40: down 0.9% Germany DAX: down 1.1% Spain IBEX: down 1.1% Italy FTSE MIB: down 1.1% |
| 8.03am: My colleague Jill Treanor takes a closer look at Moody's downgrade of 15 banks across the world. | 8.03am: My colleague Jill Treanor takes a closer look at Moody's downgrade of 15 banks across the world. |
| If one message emerges from last night's downgrade of major banks last night it is that the profitability of investment banking is poised to fall. | If one message emerges from last night's downgrade of major banks last night it is that the profitability of investment banking is poised to fall. |
| "All of the banks affected by today's actions have significant exposure to the volatility and risk of outsized losses inherent to capital market activities," Moody's said as it cut the ratings on 15 banks, including Royal Bank of Scotland, Barclays and HSBC. (Lloyds downgrade was separate). | "All of the banks affected by today's actions have significant exposure to the volatility and risk of outsized losses inherent to capital market activities," Moody's said as it cut the ratings on 15 banks, including Royal Bank of Scotland, Barclays and HSBC. (Lloyds downgrade was separate). |
| In dividing the banks up into three groups, the agency also helps create a picture of a hierarchy developing in the banking world. The first group contains HSBC, Royal Bank and Canada and JP Morgan (despite the "London whale") as the capital markets businesses are protected by strong "shock absorbers" from more stabile businesses. | In dividing the banks up into three groups, the agency also helps create a picture of a hierarchy developing in the banking world. The first group contains HSBC, Royal Bank and Canada and JP Morgan (despite the "London whale") as the capital markets businesses are protected by strong "shock absorbers" from more stabile businesses. |
| The second group includes the likes of Barclays and Goldman Sachs which rely on big returns on capital markets to meet promises of shareholder returns. The third group includes Royal Bank of Scotland, 83% owned by the taxpayer, and US banks Bank of America, Citigroup and Morgan Stanley which have shock absorbers which are "thinner or less reliable" than those in the other groups. | The second group includes the likes of Barclays and Goldman Sachs which rely on big returns on capital markets to meet promises of shareholder returns. The third group includes Royal Bank of Scotland, 83% owned by the taxpayer, and US banks Bank of America, Citigroup and Morgan Stanley which have shock absorbers which are "thinner or less reliable" than those in the other groups. |
| Bond market expert Gary Jenkins of research house Swordfish asked the key question on Friday - do these downgrades matter? His answer: "Ratings are a relative scale and if an entire industry is shifted then one could argue that the impact should be limited. The problem as I see it is that when the next hard recession hits these banks have a lot less ratings flexibility before they start staring at the non-investment grade cliff". | Bond market expert Gary Jenkins of research house Swordfish asked the key question on Friday - do these downgrades matter? His answer: "Ratings are a relative scale and if an entire industry is shifted then one could argue that the impact should be limited. The problem as I see it is that when the next hard recession hits these banks have a lot less ratings flexibility before they start staring at the non-investment grade cliff". |
| The reality is that the UK's banks are all above the crucial investment grade and knew these downgrades were on the cards. Will it push costs up for customers? Well Lloyds insisted last night that it did not think it should affect its costs - no excuse there, then, for raising costs to consumers. | The reality is that the UK's banks are all above the crucial investment grade and knew these downgrades were on the cards. Will it push costs up for customers? Well Lloyds insisted last night that it did not think it should affect its costs - no excuse there, then, for raising costs to consumers. |
| 7.53am: Not much economic data out today, but plenty of meetings. The leaders of Germany, France, Italy and Spain will be hoping to find some common ground at a meeting in Rome today, in an attempt to restore confidence in the eurozone ahead of a full EU summit next week. | 7.53am: Not much economic data out today, but plenty of meetings. The leaders of Germany, France, Italy and Spain will be hoping to find some common ground at a meeting in Rome today, in an attempt to restore confidence in the eurozone ahead of a full EU summit next week. |
| The Ecofin Council – a group of the economics and finance ministers of the 27 European Union member states – is taking place in Luxembourg. And in the UK, the Bank of England Financial Policy Committee is holding its quarterly meeting, where it may discuss whether banks' liquidity requirements should be eased. Here's today's agenda: | The Ecofin Council – a group of the economics and finance ministers of the 27 European Union member states – is taking place in Luxembourg. And in the UK, the Bank of England Financial Policy Committee is holding its quarterly meeting, where it may discuss whether banks' liquidity requirements should be eased. Here's today's agenda: |
| • Germany IFO business climate for June: 9am • Italy consumer confidence for June: 9am • Spain's economy ministry briefing: 11.30am • Canada consumer price index for May: 1.30pm | • Germany IFO business climate for June: 9am • Italy consumer confidence for June: 9am • Spain's economy ministry briefing: 11.30am • Canada consumer price index for May: 1.30pm |
| In the debt markets, the UK is selling Treasury bills. | In the debt markets, the UK is selling Treasury bills. |
| 7.43am: Good morning and welcome to our rolling coverage of the eurozone debt crisis. | 7.43am: Good morning and welcome to our rolling coverage of the eurozone debt crisis. |
| Last night, ratings agency Moody's downgraded 15 banks and financial organisations across the world, including Barclays, HSBC and Royal Bank of Scotland. | Last night, ratings agency Moody's downgraded 15 banks and financial organisations across the world, including Barclays, HSBC and Royal Bank of Scotland. |
| And the IMF published a report calling for the European Central Bank to cut interest rates, and urging the eurozone to channel aid directly to struggling banks, rather than via governments. The fund is pushing for a European banking union "as an immediate priority", as well as greater fiscal integration, and jointly guaranteed eurozone debt. | And the IMF published a report calling for the European Central Bank to cut interest rates, and urging the eurozone to channel aid directly to struggling banks, rather than via governments. The fund is pushing for a European banking union "as an immediate priority", as well as greater fiscal integration, and jointly guaranteed eurozone debt. |