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Varoufakis Tapes: French government 'terrified' of Berlin's austerity drive - live updates Varoufakis Tapes: French government 'terrified' of Berlin's austerity drive - live updates
(35 minutes later)
1.24pm BST13:24
Greek insiders: Alexis Tsipras considering November 8 election
Helena Smith
Over in Athens prime minister Alexis Tsipras marks six months in office today with his party divided and almost every promise he ever made overturned.
Our correspondent Helena Smith reports
Alexis Tsipras’ political dexterity will be tested again this afternoon when he presides over a critical meeting of his Syriza’s party’s political secretariat. It will not be easy. The coalition of the radical left (if that is what Syriza can now be called) is in shellshock over Tsipras’ embrace of the neo-liberal policies he had once so stridently opposed, in return for talks on a third bailout.`
The argument that no plausible alternative exists is not washing with hardliners who will be in attendance. Indicative of that stance, the Left Platform’s website, ISKRA (so named for the paper set up in exile by Vladimir Lenin) has declared “the battle continues” with hardliners drawing their line in the sand.
Tellingly, at the same time that Tsipras attempts to win over his doubting comrades, the Left Platform’s leader Panagiotis Lafazanis will be addressing supporters at a separate rally (in celebration of ISKRA’s fifth anniversary) under the banner:
“No has not been defeated. We are continuing.”
Tsipras is in effect overseeing a minority government, given that a third of his MPs are no longer prepared to endorse EU-IMF mandated reforms. Pressure is now building on Syriza’s dissidents to step down.
Over the weekend, several of his closest allies, including minister of state Nikos Pappas, threw down the gauntlet saying the time had come for the rebels to either back the government or leave. Speaking on behalf of the hardliners, Lafazanis has repeatedly ruled out resigning saying that it is they who have remained faithful to the party’s pre-electoral commitments.
“In no way do I seek the break-up of Syriza, I am a founding member of Syriza,” Lafazanis told media outlets on Sunday.
“What I want is for the new memorandum [outlining the tough terms of further financial assistance] to be cancelled and for Syriza to not be transformed into a memorandum force like New Democracy and Pasok. I will support the government in the implementation of the radical programme with which it was elected.”
Tsipras is expected this afternoon to ram home the message that with Greece’s exit from the euro zone presaging assured catastrophe, a third bailout is the only option. “We will demand a central committee party convention,” said one well-placed source who now aligns with the hardliners.
“Tsipras won’t want that because the central committee [Syriza’s governing body] is against the measures but that is what we will do.”
Insiders say Tsipras has a road-map of sorts – one that starts with the new loan agreement being negotiated by August 18, Syriza calling an urgent party conference (which would deal with dissidents) at the end of September and elections being held on November 8.
A new election could give young leader a new mandate to enforce controversial reforms.
But much, in the meantime, will rest on the prime minister retaining control of his party. If he loses it altogether anything could happen.
1.20pm BST13:20
One important point on the Varoufakis Tapes - this call with top fund managers at OMFIF took place on 16 July.
That’s 10 days after he resigned, and three days after EU summit where Greece caved in and accepted unprecedented and sweeping austerity measures, easing fears that it could leave the single currency.
Updated at 1.20pm BST
1.05pm BST13:05
The IMF has confirmed that technical talks over Greece’s new bailout are getting underway.
A Fund spokesperson says:
“A technical team will start work in Athens on Monday to take stock of recent developments.”
The mission chiefs, though, may not arrive for several days. Reuters reports that they are due “by Friday”.
12.57pm BST12:57
Heads-up: Paul Mason, Channel 4’s economics editor, is ready to take your questions:
My web chat at the Guardian about my book Postcapitalism starting at 1300 bst http://t.co/XkCERlmi4T
12.52pm BST12:5212.52pm BST12:52
Yanis Varoufakis's plan to replace the euroYanis Varoufakis's plan to replace the euro
FastFT are also transcribing the Varoufakis tapes - here’s the section where the former finance minister told a group of hedge fund manager about his plan for a parallel banking system:FastFT are also transcribing the Varoufakis tapes - here’s the section where the former finance minister told a group of hedge fund manager about his plan for a parallel banking system:
We did have a plan B but the problem was to go from the five people who were planning it to the thousands that would have to implement it.We did have a plan B but the problem was to go from the five people who were planning it to the thousands that would have to implement it.
The prime minister, before he became prime minister, had given me the green light to come up with a Plan B. I assembled a very able team, a small small team under wraps for obvious reasons. The difficulty was going from the five people who planned it to the 1000 that would be implementing it. For that i had to receive another authorization that never came.The prime minister, before he became prime minister, had given me the green light to come up with a Plan B. I assembled a very able team, a small small team under wraps for obvious reasons. The difficulty was going from the five people who planned it to the 1000 that would be implementing it. For that i had to receive another authorization that never came.
There is the website of the tax office where citizens go and use their tax file number and transfer monies to their tax. We were planning to create surreptitiously reserve accounts attached to every tax file number without telling anyone. At the touch of the button to allow us to give Pin numbers to tax payers so when the state owed, say, €1m to a pharmaceutical company, we could create a digital transfer, and a Pin.There is the website of the tax office where citizens go and use their tax file number and transfer monies to their tax. We were planning to create surreptitiously reserve accounts attached to every tax file number without telling anyone. At the touch of the button to allow us to give Pin numbers to tax payers so when the state owed, say, €1m to a pharmaceutical company, we could create a digital transfer, and a Pin.
That would have created a parallel system so while the banks were shut thanks to the ECB’s aggressive action, it would give us some breathing space. This was very well developed.That would have created a parallel system so while the banks were shut thanks to the ECB’s aggressive action, it would give us some breathing space. This was very well developed.
We could have extended it using apps on smart phones and it could have become a functioning parallel system. it would have been euro denominated but it could have been transferred to drachma at the touch of a button.We could have extended it using apps on smart phones and it could have become a functioning parallel system. it would have been euro denominated but it could have been transferred to drachma at the touch of a button.
So as explained earlier, Varoufakis took matters into his own hands:So as explained earlier, Varoufakis took matters into his own hands:
We decided to hack into my minister’s own software programme to copy the code of the tax system’s website onto a large computer in his office so he could work out how to design this parallel payments system. We were ready to get the green light from the prime minister when the banks closed.We decided to hack into my minister’s own software programme to copy the code of the tax system’s website onto a large computer in his office so he could work out how to design this parallel payments system. We were ready to get the green light from the prime minister when the banks closed.
Yanis Varoufakis, the childhood friend, and smart phone apps. The covert plan to replace the euro: http://t.co/Prd41AcDCqYanis Varoufakis, the childhood friend, and smart phone apps. The covert plan to replace the euro: http://t.co/Prd41AcDCq
Updated at 12.52pm BSTUpdated at 12.52pm BST
12.26pm BST12:2612.26pm BST12:26
Varoufakis: French are terrified of German demandsVaroufakis: French are terrified of German demands
Having explained his secret plan for a parallel banking system to top financiers, Yanis Varoufakis went on to warn that the French government is “terrified” of the austerity demanded by Germany.Having explained his secret plan for a parallel banking system to top financiers, Yanis Varoufakis went on to warn that the French government is “terrified” of the austerity demanded by Germany.
He explained that Paris is playing for time, in the face of Berlin’s push for closer fiscal union.He explained that Paris is playing for time, in the face of Berlin’s push for closer fiscal union.
The French are terrified. They are terrified because they know that if they’re going to shrink their budget deficit to the levels that Berlin demands, the Parisan government will certainly fall.The French are terrified. They are terrified because they know that if they’re going to shrink their budget deficit to the levels that Berlin demands, the Parisan government will certainly fall.
There is no way that they can politically handle the kind of austerity that is demanded by Berlin.There is no way that they can politically handle the kind of austerity that is demanded by Berlin.
Varoufakis then explains how Wolfgang Schäuble has outlined to him his plan to reshape the eurozone, to add more political union to make it sustainable.Varoufakis then explains how Wolfgang Schäuble has outlined to him his plan to reshape the eurozone, to add more political union to make it sustainable.
And, Varoufakis added, Schäuble believes that a Grexit will equip him with:And, Varoufakis added, Schäuble believes that a Grexit will equip him with:
sufficient terrorising power to impose on Paris what the French are resisting, which is a degree of budget-making powers from Paris to Brussels.sufficient terrorising power to impose on Paris what the French are resisting, which is a degree of budget-making powers from Paris to Brussels.
Varoufakis' tapes suggest that #Schaeuble wanted #Grexit in order to enforce more Eurozone-level discipline and policy-making.Varoufakis' tapes suggest that #Schaeuble wanted #Grexit in order to enforce more Eurozone-level discipline and policy-making.
12.13pm BST12:1312.13pm BST12:13
'I'll just deny it'. What on earth was Varoufakis doing saying these things, to these guys? http://t.co/Aba4UsTz7n'I'll just deny it'. What on earth was Varoufakis doing saying these things, to these guys? http://t.co/Aba4UsTz7n
'You can't tell anyone that... Even if they do, I'll deny I said it' - Yanis Varoufakis #ToxicMedia'You can't tell anyone that... Even if they do, I'll deny I said it' - Yanis Varoufakis #ToxicMedia
12.11pm BST12:1112.11pm BST12:11
Varoufakis: creditors are split over GreeceVaroufakis: creditors are split over Greece
This recording of Yanis Varoufakis briefing top financiers about the Greek crisis is unmissable.This recording of Yanis Varoufakis briefing top financiers about the Greek crisis is unmissable.
Around 12 minutes in, he talks about the major tussle between the European Stability Mechanism, European Commission, IMF and German finance minister Wolfgang Schäuble.Around 12 minutes in, he talks about the major tussle between the European Stability Mechanism, European Commission, IMF and German finance minister Wolfgang Schäuble.
There is a complete lack of coordination between the creditors, Varoufakis tells former UK chancellor Norman Lamont (and others on the call).There is a complete lack of coordination between the creditors, Varoufakis tells former UK chancellor Norman Lamont (and others on the call).
Wolfgang has quite clearly said to me that he wants Grexit. He clearly believes that this extend and pretend is unacceptable. This is the one point where we see eye to eye - I agree with him, but for completely different reasons.Wolfgang has quite clearly said to me that he wants Grexit. He clearly believes that this extend and pretend is unacceptable. This is the one point where we see eye to eye - I agree with him, but for completely different reasons.
The IMF does not want an agreement because it does not want to violate its charter again to provide new loans to a country whose debt is unviable.The IMF does not want an agreement because it does not want to violate its charter again to provide new loans to a country whose debt is unviable.
The Commission really wants the deal to go ahead, Merkel wants this deal to go ahead.The Commission really wants the deal to go ahead, Merkel wants this deal to go ahead.
Updated at 12.18pm BSTUpdated at 12.18pm BST
11.56am BST11:5611.56am BST11:56
Varoufakis's Plan B tapes released.Varoufakis's Plan B tapes released.
Who’d like to hear Yanis Varoufakis, Greece’s former finance minister, telling fund managers about his secret plan to create a parallel payment system?Who’d like to hear Yanis Varoufakis, Greece’s former finance minister, telling fund managers about his secret plan to create a parallel payment system?
Well, it’s your lucky day. The Official Monetary and Financial Institutions Forum has just released the recording of Varoufakis explaining how he was authorised to create Plan B in case negotiations failed.Well, it’s your lucky day. The Official Monetary and Financial Institutions Forum has just released the recording of Varoufakis explaining how he was authorised to create Plan B in case negotiations failed.
With approval from @yanisvaroufakis, the 16 July telephone recording has been published on the @OMFIF website. http://t.co/USsF13Tl8ZWith approval from @yanisvaroufakis, the 16 July telephone recording has been published on the @OMFIF website. http://t.co/USsF13Tl8Z
As Kathimerini first reported yesterday, Varoufakis explains how he engaged a childhood friend to help, but found that “the General Secretary of Public Revenues within my ministry is controlled fully and directly by the troika.”As Kathimerini first reported yesterday, Varoufakis explains how he engaged a childhood friend to help, but found that “the General Secretary of Public Revenues within my ministry is controlled fully and directly by the troika.”
It was not under control of my ministry, of me as minister, it was controlled by Brussels. The general secretary is appointed effectively through a process which is troika-controlled and the whole mechanism within. It’s like the Inland Revenue in the UK being controlled by Brussels.It was not under control of my ministry, of me as minister, it was controlled by Brussels. The general secretary is appointed effectively through a process which is troika-controlled and the whole mechanism within. It’s like the Inland Revenue in the UK being controlled by Brussels.
So.... “we decided to hack into my ministry’s own software program”....to be ready for when Greece’s banks were closed by the European Central Bank.So.... “we decided to hack into my ministry’s own software program”....to be ready for when Greece’s banks were closed by the European Central Bank.
Varoufakis cautioned his listeners to keep this to themselves, adding:Varoufakis cautioned his listeners to keep this to themselves, adding:
And even if they do [tell anyone]... I will deny I said it.And even if they do [tell anyone]... I will deny I said it.
Good luck with that....Good luck with that....
Varoufakis also warns that the current bailout deal is not viable, and claims that German finance minister Wolfgang Schäuble is “hell-bent” on engineering Grexit.Varoufakis also warns that the current bailout deal is not viable, and claims that German finance minister Wolfgang Schäuble is “hell-bent” on engineering Grexit.
Updated at 12.15pm BSTUpdated at 12.15pm BST
11.31am BST11:3111.31am BST11:31
Greece's quiet bank run continued in JuneGreece's quiet bank run continued in June
Analysts have long suspected that Greece’s banking sector suffered a large drop in deposits last month, and now we have the evidence.Analysts have long suspected that Greece’s banking sector suffered a large drop in deposits last month, and now we have the evidence.
New data from the ECB has shown that Greek savers pulled another €8bn out of their accounts as the country staggered towards the end of its old bailout.New data from the ECB has shown that Greek savers pulled another €8bn out of their accounts as the country staggered towards the end of its old bailout.
That’s a sharp acceleration on the €3.7bn taken out in May, and means deposits are at a new 11-year low.That’s a sharp acceleration on the €3.7bn taken out in May, and means deposits are at a new 11-year low.
CHART: New official data show #Greece deposits down by 8bn€ in June. Total bleeding in 1st half of 2015: 40bn€ gone. pic.twitter.com/YwUjj3ztZlCHART: New official data show #Greece deposits down by 8bn€ in June. Total bleeding in 1st half of 2015: 40bn€ gone. pic.twitter.com/YwUjj3ztZl
Updated at 11.32am BSTUpdated at 11.32am BST
10.36am BST10:3610.36am BST10:36
Speculation is growing that the Greek stock market might reopen on Tuesday, more than four weeks after capital controls were imposed:Speculation is growing that the Greek stock market might reopen on Tuesday, more than four weeks after capital controls were imposed:
Athens Exchange expected to open Tuesday with restrictions & @ekathimerini sources indicate restrictions could be lifted after about a weekAthens Exchange expected to open Tuesday with restrictions & @ekathimerini sources indicate restrictions could be lifted after about a week
10.31am BST10:3110.31am BST10:31
The falling oil price has helped to drag Bloomberg’s commodity price index to a new 13-year low:The falling oil price has helped to drag Bloomberg’s commodity price index to a new 13-year low:
#Commodities and #oil rout deepens, pushing the Bloomberg Commodity Index down 60% from 2008 peak (fresh 13-year low) pic.twitter.com/DUaKdQ49SY#Commodities and #oil rout deepens, pushing the Bloomberg Commodity Index down 60% from 2008 peak (fresh 13-year low) pic.twitter.com/DUaKdQ49SY
10.25am BST10:2510.25am BST10:25
Oil hits three-month lowOil hits three-month low
The oil price has been hit by fears over the global economy today.The oil price has been hit by fears over the global economy today.
Brent crude is down 0.5% to $54.27 per barrel, the lowest since early April.Brent crude is down 0.5% to $54.27 per barrel, the lowest since early April.
Updated at 10.25am BSTUpdated at 10.25am BST
10.13am BST10:1310.13am BST10:13
Today’s selloff will force the Chinese government to take new measures to prop up its stock market, according to analysts at Citi:Today’s selloff will force the Chinese government to take new measures to prop up its stock market, according to analysts at Citi:
Citi on #China rout: The calm sentiment of the bounce has been broken. So govt agencies will have to step in again. pic.twitter.com/6u8kb6nSHUCiti on #China rout: The calm sentiment of the bounce has been broken. So govt agencies will have to step in again. pic.twitter.com/6u8kb6nSHU
10.10am BST10:1010.10am BST10:10
The Chinese market rout comes as investors ponder whether the US Federal Reserve will raise interest rates in September, or hold on until perhaps December, points out Kit Juckes of Société Générale:The Chinese market rout comes as investors ponder whether the US Federal Reserve will raise interest rates in September, or hold on until perhaps December, points out Kit Juckes of Société Générale:
It’s taken a single day’s trading to wipe out two weeks’ worth of bounce in the Shanghai composite equity index.It’s taken a single day’s trading to wipe out two weeks’ worth of bounce in the Shanghai composite equity index.
We were ‘supposed’ be be focusing on the US and the ‘will they/won’t they hike in September’ debate by now, but China/commodities have yet again muddied the waters.We were ‘supposed’ be be focusing on the US and the ‘will they/won’t they hike in September’ debate by now, but China/commodities have yet again muddied the waters.
9.58am BST09:589.58am BST09:58
Chinese investors are nursing some very heavy losses today, and must also be fearing more turmoil when markets reopen on Tuesday.Chinese investors are nursing some very heavy losses today, and must also be fearing more turmoil when markets reopen on Tuesday.
Reuters reports that 1,500 individual shares were suspended after crashing 10% - the maximum allowed – fuelling fears that a a full-blown crash is building.Reuters reports that 1,500 individual shares were suspended after crashing 10% - the maximum allowed – fuelling fears that a a full-blown crash is building.
#China crash: More than 1,500 shares listed in Shanghai and Shenzhen dived by the daily limit. http://t.co/gapGk0CYGo#China crash: More than 1,500 shares listed in Shanghai and Shenzhen dived by the daily limit. http://t.co/gapGk0CYGo
9.52am BST09:529.52am BST09:52
Very few stock markets have avoided being dragged down today, either in Asia or Europe.Very few stock markets have avoided being dragged down today, either in Asia or Europe.
9.47am BST09:479.47am BST09:47
Amateur chartists in the audience may see some similarities between today’s slump and the events of 2007 and 2008:Amateur chartists in the audience may see some similarities between today’s slump and the events of 2007 and 2008:
Updated at 9.47am BSTUpdated at 9.47am BST
9.37am BST09:379.37am BST09:37
Here’s confirmation that China’s main stock markets just suffered its biggest selloff since the dawn of the credit crunch over eight years ago.Here’s confirmation that China’s main stock markets just suffered its biggest selloff since the dawn of the credit crunch over eight years ago.
How today's session on the Shanghai market rollercoaster compares with other one-day drops. http://t.co/VqPFn9JYER pic.twitter.com/4YZ7Dm9rpTHow today's session on the Shanghai market rollercoaster compares with other one-day drops. http://t.co/VqPFn9JYER pic.twitter.com/4YZ7Dm9rpT
9.26am BST09:269.26am BST09:26
German business confidence beats forecastsGerman business confidence beats forecasts
Germany appears to have taken the Greek debt crisis in its stride, with business confidence rising this month.Germany appears to have taken the Greek debt crisis in its stride, with business confidence rising this month.
The IFO thinktank’s monthly business climate survey ticked up to 108 this month, up from 107.5 in June. Firms reported an improvement in current conditions, and are slightly more optimistic about future prospects.The IFO thinktank’s monthly business climate survey ticked up to 108 this month, up from 107.5 in June. Firms reported an improvement in current conditions, and are slightly more optimistic about future prospects.
It appears that the underlying strength of Europe’s largest economy helped it to defy the turmoil in Athens in recent months.It appears that the underlying strength of Europe’s largest economy helped it to defy the turmoil in Athens in recent months.
Carsten Brzeski, ING economists, says:Carsten Brzeski, ING economists, says:
Even if the doses has been reduced somewhat, the German economy is still on steroids. Despite some recent rebounds, the weak euro exchange rate and low energy prices are still artificially extending the last phase of a very positive reform-growth cycle.Even if the doses has been reduced somewhat, the German economy is still on steroids. Despite some recent rebounds, the weak euro exchange rate and low energy prices are still artificially extending the last phase of a very positive reform-growth cycle.
Forget about Greece? German Ifo increases in July. A quick take. http://t.co/gz7cgDbskmForget about Greece? German Ifo increases in July. A quick take. http://t.co/gz7cgDbskm
9.10am BST09:109.10am BST09:10
Greek jitters weigh on European marketsGreek jitters weigh on European markets
Europe’s stock markets are also suffering a bout of Greek worries, after talks with creditors had a false start on Friday (but should start today or tomorrow).Europe’s stock markets are also suffering a bout of Greek worries, after talks with creditors had a false start on Friday (but should start today or tomorrow).
Sunday’s revelations about plans for a secret parallel payment system haven’t calmed nerves either, as Connor Campbell of SpreadEX explains:Sunday’s revelations about plans for a secret parallel payment system haven’t calmed nerves either, as Connor Campbell of SpreadEX explains:
The Eurozone indices weren’t helped by the weekend’s news that Yanis Varoufakis, at the behest of Tsipras, spent months working on a parallel banking system that, for all intents and purposes, would have dealt with an abrupt switch from euro to drachma; an unwelcome reminder as negotiations begin of the Grexit-stakes that lie at the heart of the saga.The Eurozone indices weren’t helped by the weekend’s news that Yanis Varoufakis, at the behest of Tsipras, spent months working on a parallel banking system that, for all intents and purposes, would have dealt with an abrupt switch from euro to drachma; an unwelcome reminder as negotiations begin of the Grexit-stakes that lie at the heart of the saga.
Here’s our take on the story:Here’s our take on the story:
Related: Greece rocked by reports of secret plan to raid banks for drachma returnRelated: Greece rocked by reports of secret plan to raid banks for drachma return
Ambrose Evans-Pritchard of the Telegraph has spoken with Varoufakis, who confirmed the story but denied that he’d been plotting Greece’s exit from the eurozone.Ambrose Evans-Pritchard of the Telegraph has spoken with Varoufakis, who confirmed the story but denied that he’d been plotting Greece’s exit from the eurozone.
Varoufakis expects treason indictment. My two drachma on Plan B leak, his reaction. Greek crisis will go on and on http://t.co/a1VTNW6ZtRVaroufakis expects treason indictment. My two drachma on Plan B leak, his reaction. Greek crisis will go on and on http://t.co/a1VTNW6ZtR
Updated at 9.10am BSTUpdated at 9.10am BST
8.59am BST08:598.59am BST08:59
Europe’s stock markets have followed China’s lead, with the French CAC and German DAX both falling over 1%.Europe’s stock markets have followed China’s lead, with the French CAC and German DAX both falling over 1%.
The FTSE 100 is only down 0.35%, though, with mining stocks recovering after Friday’s rout.The FTSE 100 is only down 0.35%, though, with mining stocks recovering after Friday’s rout.
8.51am BST08:518.51am BST08:51
Here’s another reason for alarm: the amount of capital leaving China has accelerated sharply in recent months.Here’s another reason for alarm: the amount of capital leaving China has accelerated sharply in recent months.
China's capital outflows are accelerating at an alarming rate. Chart via Goldman: pic.twitter.com/LUQpjUcnnlChina's capital outflows are accelerating at an alarming rate. Chart via Goldman: pic.twitter.com/LUQpjUcnnl
That indicates companies are investing less, suggesting economic growth is faltering.That indicates companies are investing less, suggesting economic growth is faltering.
Updated at 10.07am BSTUpdated at 10.07am BST
8.48am BST08:488.48am BST08:48
Chinese share prices were a sea of green today (red, being a lucky colour, is used for rising prices):Chinese share prices were a sea of green today (red, being a lucky colour, is used for rising prices):
8.46am BST08:468.46am BST08:46
Andrew MacFarlane of BNP Paribas says today’s slump shows “the vulnerability of the Chinese market despite the recent government support.”Andrew MacFarlane of BNP Paribas says today’s slump shows “the vulnerability of the Chinese market despite the recent government support.”
8.44am BST08:448.44am BST08:44
Today’s crash comes three weeks after China took dramatic action to stem falling prices.Today’s crash comes three weeks after China took dramatic action to stem falling prices.
In a remarkable intervention, Beijing banned large shareholders from selling stakes, ordered state-run institutions to buy shares and letting many companies halt trading in their shares.In a remarkable intervention, Beijing banned large shareholders from selling stakes, ordered state-run institutions to buy shares and letting many companies halt trading in their shares.
My colleague Nils Pratley covered it here:My colleague Nils Pratley covered it here:
Related: Beijing's desperate attempts to control the stock market will end badlyRelated: Beijing's desperate attempts to control the stock market will end badly
In the short term, China’s actions did help the Shanghai stock market to recover:In the short term, China’s actions did help the Shanghai stock market to recover:
But that sticking-plaster appears to be coming off. On Friday, it emerged that the International Monetary Fund was pushing China to unwind its intervention, so that market forces could set the true price of shares. That may now be underway...But that sticking-plaster appears to be coming off. On Friday, it emerged that the International Monetary Fund was pushing China to unwind its intervention, so that market forces could set the true price of shares. That may now be underway...
8.39am BST08:398.39am BST08:39
Analysts are struggling to explain exactly why the Chinese stock markets suffered such a slump.Analysts are struggling to explain exactly why the Chinese stock markets suffered such a slump.
Reuters attributes it to “profit-taking, concerns over economic health and fears of an end to Beijing’s inclination toward looser monetary policies.”Reuters attributes it to “profit-taking, concerns over economic health and fears of an end to Beijing’s inclination toward looser monetary policies.”
8.34am BST08:348.34am BST08:34
Many stocks on the Shanghai stock market were suspended after plunging 10%, which is the maximum allowed in one day.Many stocks on the Shanghai stock market were suspended after plunging 10%, which is the maximum allowed in one day.
Only four stocks rose, out of 300.Only four stocks rose, out of 300.
8.21am BST08:218.21am BST08:21
Shanghai stock market plunges by 8.5%Shanghai stock market plunges by 8.5%
The Chinese stock market has suffered its worst one-day fall in eight years, after a day of panic selling.The Chinese stock market has suffered its worst one-day fall in eight years, after a day of panic selling.
The benchmark Shanghai composite index just crashed by 8.5%, which is the biggest one-day fall since 2007, according to Bloomberg data.The benchmark Shanghai composite index just crashed by 8.5%, which is the biggest one-day fall since 2007, according to Bloomberg data.
The slump was triggered by worries over the Chinese economy, with a new survey showing that profit at China’s industrial firms fell by 0.3% last month.The slump was triggered by worries over the Chinese economy, with a new survey showing that profit at China’s industrial firms fell by 0.3% last month.
But the scale of the rout suggests investors are also losing faith in recent efforts by the Beijing government to prop up share prices.But the scale of the rout suggests investors are also losing faith in recent efforts by the Beijing government to prop up share prices.
Updated at 8.27am BSTUpdated at 8.27am BST
8.06am BST08:068.06am BST08:06
Introduction: China woes mount, as creditors return to GreeceIntroduction: China woes mount, as creditors return to Greece
Good morning, and welcome to our rolling coverage of the financial markets, the world economy, the eurozone and business.Good morning, and welcome to our rolling coverage of the financial markets, the world economy, the eurozone and business.
With Greece temporarily on the back-burner (but not for long), China has elbowed its way to the forefront of investors’ attention, on fears that its economy is suffering a serious slowdown.With Greece temporarily on the back-burner (but not for long), China has elbowed its way to the forefront of investors’ attention, on fears that its economy is suffering a serious slowdown.
And the Chinese stock markets is suffering a bad day. The benchmark Shanghai index is has slumped by around 7% in late trading, in another rush of late selling.And the Chinese stock markets is suffering a bad day. The benchmark Shanghai index is has slumped by around 7% in late trading, in another rush of late selling.
That’s likely to hit Europe’s stock markets this morning too.That’s likely to hit Europe’s stock markets this morning too.
Also coming up todayAlso coming up today
Negotiators from Greece’s creditors are due to arrive in Athens today formally begin talks on a €86bn bailout, after talks were aborted on Friday due to a row over access to ministries - and which hotel would house the Troika.Negotiators from Greece’s creditors are due to arrive in Athens today formally begin talks on a €86bn bailout, after talks were aborted on Friday due to a row over access to ministries - and which hotel would house the Troika.
We find out how much damage the Greek crisis has caused to Germany’s economy, when the IFO index is released at 9am.We find out how much damage the Greek crisis has caused to Germany’s economy, when the IFO index is released at 9am.
And Greeks are also digesting the news that former finance minister Yanis Varoufakis spent months on a plan to develop a parallel banking system while in office.And Greeks are also digesting the news that former finance minister Yanis Varoufakis spent months on a plan to develop a parallel banking system while in office.
Sunday’s edition of the Greek newspaper Kathimerini has the story.Sunday’s edition of the Greek newspaper Kathimerini has the story.
Varoufakis claims had approval to plan parallel banking systemVaroufakis claims had approval to plan parallel banking system
Here’s a flavour:Here’s a flavour:
Former Finance Minister Yanis Varoufakis has claimed that he was authorized by Alexis Tsipras last December to look into a parallel payment system that would operate using wiretapped tax registration numbers (AFMs) and could eventually work as a parallel banking system, Kathimerini has learned.Former Finance Minister Yanis Varoufakis has claimed that he was authorized by Alexis Tsipras last December to look into a parallel payment system that would operate using wiretapped tax registration numbers (AFMs) and could eventually work as a parallel banking system, Kathimerini has learned.
In a teleconference call with members of international hedge funds that was allegedly coordinated by former British Chancellor of the Exchequer Norman Lamont, Varoufakis claimed to have been given the okay by Tsipras last December – a month before general elections that brought SYRIZA to power – to plan a payment system that could operate in euros but which could be changed into drachmas “overnight” if necessary, Kathimerini understands.In a teleconference call with members of international hedge funds that was allegedly coordinated by former British Chancellor of the Exchequer Norman Lamont, Varoufakis claimed to have been given the okay by Tsipras last December – a month before general elections that brought SYRIZA to power – to plan a payment system that could operate in euros but which could be changed into drachmas “overnight” if necessary, Kathimerini understands.
Lamont’s involvement is the icing on a particularly eye-catching cake.Lamont’s involvement is the icing on a particularly eye-catching cake.
I’ll be tracking all the main events through the day.....I’ll be tracking all the main events through the day.....
Updated at 8.10am BSTUpdated at 8.10am BST