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| Germany and Greece to discuss bailout at EU summit - live updates | Germany and Greece to discuss bailout at EU summit - live updates |
| (34 minutes later) | |
| 8.49am BST08:49 | |
| Greek PM Alexis Tsipras will meet with Francois Hollande in Riga tonight as well as Angela Merkel, in an attempt to reach a political solution to the crisis. | |
| That’s via the Kathimerini newspaper, which adds: | |
| Tsipras is hoping that his meeting with Merkel and Hollande will result in some kind of political gesture that will help the pace and direction of deliberations with the institutions. The Greek leader is expected to tell his counterparts that his government has made as many concessions as it can and that the lenders now have to find a way to move closer to Greece. | |
| Sources said the premier will stress that the agreement will have to show that there has been a change in Greece’s policy mix. | |
| 8.47am BST08:47 | |
| Not a good morning for the economy of #Germany as Markit composite #PMI falls to 52.8 with both services and manufacturing growth slowing | |
| 8.46am BST08:46 | |
| Growth across Germany’s companies has slowed to a five-month low, adding to concerns that Europe’s largest member is coming off the boil. | |
| The German Composite Output Index calculated by Markit has fallen to 52.8, down from 54.1 in April. Firms reported weak demand, and rising cost pressures. | |
| And export orders grew at the slowest rate in three months. | |
| This suggests that Germany’s economic growth may not pick up significantly this quarter, after slowing to just 0.3% in the first quaeter. | |
| Oliver Kolodseike, Economist at Markit, says: | |
| “While the survey data are consistent with further GDP growth heading into the middle of the year, it looks as if this rate of expansion of the German economy will remain sluggish in the months ahead. | |
| German PMIs on strike. https://t.co/9KO53SDY6q | |
| | |
| 8.31am BST08:31 | |
| France’s economy is strengthening this month, although its factories are still finding conditions quite tough. | |
| That’s the verdict from Markit’s latest assessment of the eurozone’ second largest economy. Its Flash France Composite Output Index rose to 51.0, up from 50.6, showing growth picking up [50 is the cut-off point between expansion and contraction]. | |
| Firms reported a rise in new business, and in job creation. | |
| Jack Kennedy, Senior Economist at Markit, explains: | |
| “The French private sector posted further modest output growth in May, suggesting that economic expansion is being maintained through the second quarter. | |
| The service sector remained the driver of growth, offsetting another contraction in manufacturing.” | |
| 8.25am BST08:25 | |
| The two-day Riga summit which begins tonight is also David Cameron’s first meeting with fellow leaders since winning the general election. | |
| He’ll be pushing his campaign to renegotiate Britain’s relationship with the rest of the EU, before an in-out vote in 2016 or 2017. | |
| According to The Times, Cameron also wants Europe to stop referring to the euro as the single currency(!) He wants a new legally binding commitment that recognises that Europe is home to multiple currencies, removing the implicit assumption that all EU members will eventually join the euro. | |
| One source said: | |
| The British have asked the EU to accept an architecture that demonstrably shows the UK is never heading to the same destination and has a different category of membership, otherwise the UK will end up outside the EU. | |
| More here: Drop the term ‘single currency’ or we’re out, Cameron tells EU (£) | |
| Updated at 8.26am BST | |
| 8.17am BST08:17 | |
| Süddeutsche Zeitung: Eurozone could extend Greece's bailout until autumn | |
| Is the eurozone considering throwing Greece a lifeline by extending its existing bailout over the summer? | |
| German newspaper Süddeutsche Zeitung claimed last night that EU policymakers are considering extending the existing programme until the autumn. | |
| Under the plan, Athens would get almost €4bn of aid in return for reforming its VAT system, but could delay modernising its labour market and pension system until the autumn. | |
| Here’s the story: | |
| EU erwägt Verlängerung der Griechenland-Hilfe | |
| We’ve not had any official confirmation, or denial yet - but I suspect it’s only a matter of hours. | |
| Such a plan would be consistent with the Muddle-Through strategy that has prevailed through the crisis: | |
| At risk of looking silly in a few days - a Greek deal feels close. Tide over till Autumn with classic Euro-fudge on pensions/labour market? | |
| One immediate problem - €4bn isn’t enough to cover Greece’s repayments to the ECB this summer, which add up to around €6.7bn | |
| 8.02am BST08:02 | 8.02am BST08:02 |
| The Agenda: Merkel and Tsipras to meet tonight | The Agenda: Merkel and Tsipras to meet tonight |
| Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business. | Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business. |
| With time running short for Greece, could a meeting of European leaders in Riga tonight provide the spark for a deal with creditors and avert default? | With time running short for Greece, could a meeting of European leaders in Riga tonight provide the spark for a deal with creditors and avert default? |
| Greek PM Alexis Tsipras will meet with German chancellor Angela Merkel, after dinner, on the sidelines of the EU summit in the Latvian capital which begins tonight. | Greek PM Alexis Tsipras will meet with German chancellor Angela Merkel, after dinner, on the sidelines of the EU summit in the Latvian capital which begins tonight. |
| And Athens insiders hope the discussion might help to break the deadlock that threatens to leave Greece perilously short of funds to meet €1.5bn of IMF repayments in June. | And Athens insiders hope the discussion might help to break the deadlock that threatens to leave Greece perilously short of funds to meet €1.5bn of IMF repayments in June. |
| Greek spokesman Gavriel Sakellarides told us last night that: | Greek spokesman Gavriel Sakellarides told us last night that: |
| “We know that decisive decisions ultimately are taken at the level of finance ministers in the Eurogroup but at this critical moment a meeting between Tsipras and Merkel can only be helpful.” | “We know that decisive decisions ultimately are taken at the level of finance ministers in the Eurogroup but at this critical moment a meeting between Tsipras and Merkel can only be helpful.” |
| The two leaders will discuss Greece’s liquidity crisis – last night, the European Central Bank agreed to provide another €200m of emergency help. | The two leaders will discuss Greece’s liquidity crisis – last night, the European Central Bank agreed to provide another €200m of emergency help. |
| Greece and her lenders are still divided over three key issues; VAT rates, pension payments, and deregulating the labour market. | Greece and her lenders are still divided over three key issues; VAT rates, pension payments, and deregulating the labour market. |
| Tsipras’s task is to persuade fellow leaders that Greece must break with austerity. | Tsipras’s task is to persuade fellow leaders that Greece must break with austerity. |
| As Sakellarides put it: | As Sakellarides put it: |
| “The persistence of the architects of this regime and their insistence of keeping the country on the same track, is simply irrational. We want to stop the vicious cycle of debt and recession. Its not about stubbornness. Its about preserving Greece and its people.” | “The persistence of the architects of this regime and their insistence of keeping the country on the same track, is simply irrational. We want to stop the vicious cycle of debt and recession. Its not about stubbornness. Its about preserving Greece and its people.” |
| Last night, finance minister Yanis Varoufakis warned that Greece would choose to pay pensions rather than repaying the IMF, if it ran out of funds next month. | Last night, finance minister Yanis Varoufakis warned that Greece would choose to pay pensions rather than repaying the IMF, if it ran out of funds next month. |
| @yanisvaroufakis tells #c4news "If we can pay the IMF and pensions and salaries, then we shall, if not, Greece faces difficult choices." | @yanisvaroufakis tells #c4news "If we can pay the IMF and pensions and salaries, then we shall, if not, Greece faces difficult choices." |
| Also coming up today.... | Also coming up today.... |
| Flash estimates for private sector growth in France, Germany and the eurozone are released this morning, between 8am and 9am BST. That will show whether the Greek crisis is hitting demand and business confidence. | Flash estimates for private sector growth in France, Germany and the eurozone are released this morning, between 8am and 9am BST. That will show whether the Greek crisis is hitting demand and business confidence. |
| Then its UK Retail Sales data at 9.30am BST: a weak performance might fuel concerns over consumer confidence | Then its UK Retail Sales data at 9.30am BST: a weak performance might fuel concerns over consumer confidence |
| And Europe’s stock markets are expected to dip again, as the Greek crisis looms: | And Europe’s stock markets are expected to dip again, as the Greek crisis looms: |
| Here’s the opening calls: | Here’s the opening calls: |
| We’ll be tracking all the main events through the day. | We’ll be tracking all the main events through the day. |