Luke 21:9-10: [Jesus said] "When you hear of wars and revolutions, do not be frightened. These things must happen first, but the end will not come right away." Then he said to them, "Nation will rise against nation, and kingdom against kingdom."
“Against all odds, the frameworks of the world’s economic, political, and social systems are being shaken and are beginning to crumble.”
-Jim Bakker in “Prosperity and the Coming Apocalypse”
4:47pm: So who is Lucas Papademos, the man most likely to succeed George Papandreou as Greece’s next prime minister?
Helena Smith, our Athens correspondent, has the inside line on Papademos, the renowned economist and former vice president of the European Central Bank who is well respected in the EU:
For a country not only burdened by debt but closer to default than ever before, his appointment at the helm of a transitional government in Athens would be widely welcomed.
In the corridors of power in Paris and Berlin, the capitals that count in deciding Greece’s fate, he is seen as a safe pair of hands, more capable than most at navigating the crisis-hit nation away from the shores of economic Armageddon. Even better, say EU officials, the 64-year-old fits the bill of being a “neutral” non-partisan personality who can stay out of the snake-pit that is the Greek political scene.
“He’s pro-European, he knows Europe and the Europeans know him,” said prominent political commentator Paschos Mandravelis. “He would be the perfect choice.”
Papademos was educated in the United States, where he earned his first degree in physics at the Massachusetts Institute of Technology (MIT). He holds a second degree in electrical engineering and a doctorate in economics, and held academic posts at Columbia University, Harvard University and the University of Athens.
A specialist in macroeconomic theory and policy, he still teaches as a visiting professor in the US.
As we reported earlier today, Papademos was actually in America when the political crisis broke, forcing him to race to a plane to fly back to Greece. The country is now eager to see if he accepts the post.
Those who know him well said he is unlikely to agree without careful consideration – and as a man who is “naturally cautious” that could take days.
4.27pm: Silvio Berlusconi is to stake his government on a confidence vote in parliament, John Hooper tells us.
Italy’s prime minister has telephoned the newspaper Libero which quotes him as saying:
Tomorrow, there is a vote on the public accounts in the Chamber [of Deputies]. Then I shall call a confidence vote on the letter sent to the EU and ECB. I want to look into the faces of those who are trying to betray me.
That raises as many questions as it answers, however, as John explains:
Tomorrow’s ballot is not a confidence vote, so in theory – even if he loses – Berlusconi will not be forced to resign. But when, and where, the crucial confidence vote will be held is not yet clear.
Libero assumed the test would have to be in the Chamber of Deputies, which is where the government is most vulnerable. But when? According to some interpretations, Berlusconi is planning to turn tomorrow’s division on the 2010 public accounts into a confidence vote. Others believe he will call a separate and subsequent ballot to decide whether his government lives or dies.
Either way, it might allow him to wrest the initiative away from the opposition which has been threatening a motion of no confidence to get him out.
Earlier, the deputy editor of Libero implied on Twitter that Berlusconi intended circling his wagons around the letter that the ECB sent him back in August, which would have been distinctly odd as I commented at the time.
But the quote on the paper’s web site suggests he is talking about a letter sent at the end of last month to the European institutions offering a series of pledges of economic reform. That is altogether more logical.
4.12pm: The rise in Italian government bond yields hasn’t just hit the Berlusconi government and Italian taxpayers. It has also pushed up the cost of borrowing for Italian companies to painfully high levels.
My colleague Patrick Collinson warns that this makes Italian firms uncompetitive against their European rivals, and badly damages their chances of economic recovery. Nicholas Gartside, who manages $130bn in fixed income investments at JP Morgan Asset Management, told Patrick that:
Rates above 6.5% on Italian government bonds are not sustainable in the long term for Italy, although in the short term it can probably cope. The wider problem is that it raises the cost of capital for corporates and banks, which tends to be priced off the government yield curve.
So if you are an Italian company used to borrowing at 2% over the rate paid by the government, the cost of capital has now become very high. For example, Telecom Italia is having to pay more than 7% on its 2017 bonds. That’s a very expensive price to pay.
Problems are worst in the so-called ‘junk bond’ market, where companies with ratings below BBB have to pay 3-4% above government rates. It’s estimated that there’s around $325bn in European junk bonds that need to be refinanced between 2012 and 2015, and if rates continue to rise, many companies may default.
Currently, the market for refinancing their debts is virtually frozen while the turmoil continues.
4.05pm: Thanks for the many excellent comments. We were particularly impressed by this comment by MacNara (and with 102 recommendations, and counting, we’re not alone).
MacNara suggests eight innovative ways that Greece could rebuild its economy, including
* Demand that Europe co-operate in destroying tax havens.
* Strong and explicit European guarantees that would allow Greece to shrink its army
* Penalise countries who run a trade surplus year after year
The whole post is well worth a read. My immediate thought, though, is that Europe’s leaders may be too transfixed by the debt crisis to consider many long-term solutions.
Maybe once Greece’s government is in place and the €8bn aid tranche is paid, Italy’s political future is secure and a way has been found to increase the European Financial Stability Facility to €1trn or more……
3.50pm: George Osborne, the chancellor, is already in Brussels and meeting Conservative MEPs to discuss the crisis before heading off for a dinner organised by his Czech colleague and involving the ten “outs” who are not in the eurozone.
Those 10 countries, who are all members of the European Union but not the single currency, appear to be forming a tighter partnership. David Gow has more:
This is now becoming a regular occurrence, and David Cameron went to a similar dinner of the “outs” when he was last in the EU capital. The clear aim is to plot tactics ahead of tomorrow’s Ecofin meeting – and ensure, above all, that the eurogroup “caucus” doesn’t steamroller the rest with pre-cooked decisions that are against UK, Czech, Swedish etc interests. The “two-speed” Europe once abjured by all EU leaders is now a reality.
And it looks as if the “ins” of the eurogroup have pencilled in yet another meeting this month – November 17 – as well as tonight’s and one already planned for November 29.
This second November meeting would assess progress made – or otherwise – in “leveraging” the EFSF and put flesh on the bones of the €1tn plan adopted on October 27 and rubbished by the US, China et al at the G20 summit last week.
3.41pm: David Cameron is updating the House of Commons on the eurozone crisis, following last week’s G20 summit in Cannes. He says that:
The G20 sent the Eurozone a clear message: sort yourself out and then we will help, not the other way around.
The prime minister told MPs that “it is clearly in our national interests for the eurozone to sort out its problems”, and that the bailout deal agreed in October was “welcome progress”.
Now, Cameron added, the eurozone needs to implement these decisions urgently as the collapse of trading partners, whether in Europe or beyond, would have a damaging effect on our economy.
Ed Miliband, leader of the opposition, responds — criticising Cameron for trying to describe the Cannes gathering as a success (not, as appears more accurate, a flop).
My colleague Andrew Sparrow is covering the full statement in his Politics Live blog today.
3.22pm: More in from Greece, or rather Brussels, where the Greek minister of finance Evangelos Venizelos made the following statement going into a eurogroup meeting:
After a difficult week, we now have a new political situation, a new political frame in Greece. We have a new government of national unity and national responsibility. This is the proof of our commitment and our national capacity to implement the program and reconstruct the country.
Helena Smith reports that Greeks are hoping a decision will be taken to release a long-overdue €8bn package of rescue loans at the much-anticipated meeting.
Athens says without the critical aid instalment it will be staring at bankruptcy in a matter of weeks.
Incidentally, “difficult” doesn’t really sum up how last week panned out for Venizelos. On Tuesday he was submitted to hospital with stomach pains, later said to be appendix-related. When Thursday morning came, he hopped off a plane to single-handedly shoot down Papandreou’s referendum plan, and by Friday night he was playing a key role in the drive to create a unity government.
3.05pm: In Italy, one of Silvio Berlusconi’s ministers has claimed that the beleaguered prime minister may still hold a majority in the Italian parliament.
With a resignation seemingly off the table for today, the parliamentary mathematics will probably determine Berlusconi’s future.
Gianfranco Rotondi, a minister without portfolio, met with the Italian PM today – and told reporters in Milan that the battle goes.
I’m optimistic and I think we’ll hold on to the majority
If we have the majority we’ll carry on, otherwise there’ll be elections.
2.31pm: As we reported earlier, France announced a tougher fiscal consolidation programme this morning.
In the short term, the plan is designed to save an extra €7bn so that the country hits its deficit targets despite much weaker growth in 2012 (the French economy is likely to stumble along with 1% growth, not the 1.75% forecast this summer).
Economists have warned that France’s AAA rating could be at risk. Francois Fillon (left), the French prime minister, admitted himself that the country must take serious steps to remain ahead of Europe’s debt crisis:
The time has come to adjust France’s efforts. With the president, we have only one goal: to protect the French people from the serious difficulties that many European countries are now facing.
I believe that our citizens are now aware of the risks to our livelihoods and futures caused by deficits and debt “Bankruptcy is no longer an abstract term. Our financial, economic and social sovereignty require prolonged collective efforts and even some sacrifices.
From Brussels, our correspondent David Gow reports that the prospect of more French austerity has alarmed some of the country’s media:
It hasn’t escaped anybody’s notice here – and certainly not in Paris – that the Germans are cutting taxes, albeit “only” by €6bn all told in 2013 and 2014, while Sarkozy and Fillon are taking a further axe to the budget to preserve the country’s and their own triple A status.
Le Monde’s correspondent is, not without an elegant irony, very jealous. Tax yields in Germany are likely to be €40bn up on 2010 at €571.2bn.
In Greece they think the Germans are getting ready to buy up their entire country when they’re kicked out of the euro and forced to re-adopt the drachma, as German travel company TUI envisages.
2.09pm: In Greece, public opposition to the prospect of yet more austerity is growing. A militant labour group with communist links has already called a mass public rally for Thursday.
While warring politicians in the country’s two main parties have managed to take the historic step of laying down their arms long enough to form an interim administration, many politicians are questioning how long an interim government could last for.
Helena Smith reports from Athens:
“Every decision, every conversation, every move, will I am afraid, be taken not so much with the good of the country in mind but political cost for the parties involved given that we are heading for elections so soon,” said Adonis Georgiades an MP with the populist far-right LAOS party.
The prominent politicial commentator Ioannis Pretenderis has also raised the red flag.
“Cooperation is not a solution. It is a method. And a method, in itself, is not enough to lead us to a solution,” he writes in today’s mass-selling Ta Nea.
“What exactly will this government do? Will it be limited to simply negotiating whatever was agreed on 26 October?” he asked referring to the latest bailout program painstakingly hammered out by EU leaders in Brussels last month. “Or will it exercise normal government?
Nor does it seem that the new interim administration will necessarily go down well with Greeks now exhausted with wave upon wave of austerity. Unionists are also drawing the line in the battle sands, with the militant communist-aligned labour organisation PAME announcing a mass rally for November 10th.
“The new government that they have assembled has nothing to do with the people or their problems,” it says. “It is a government that is deeply hostile and has as its mission the defence, by every means, of saving monopolies and destroying the peoples’ movement. They want to vote through the new agreement, with its new austerity measures, with the least possible social reaction. They have no right to vote this new agreement with new barbaric measures that will be enforced until 2030 and then take us to elections. We demand elections now!”
1.34pm: Turning attention away from Berlusconi temporarily and back to Greece – I’m afraid we must report that the talks on the formation of a coalition government have hit a snag — the favourite candidate to replace George Papandreou isn’t even in Greece.
Helena Smith, our Athens correspondent, tells me that Lucas Papademos, the front-runner for the job and former vice president of the European Central Bank, is now racing back to his homeland. This threatens to delay the vital process of choosing the new leader.
Helena reports that:
The 64-year-old Papademos was in the US when he was informed of the ground-breaking political developments in Greece and is now making his way back to Athens poste-haste.
Formally the governor of the Bank of Greece for almost eight years, from October 1994 to May 2004, Papademos is widely regarded as a “neutral figure,” who is well respected in Europe and would be a safe pair of hands at the helm of government. But friends who know him well have told our correspondent that Papademos, who is also a well-respected academic, is unlikely to agree to the job without carefully weighing things up first.
“As things stand, the leaders of both political parties want to give him his cabinet, tell him what to do and let him go by the end of January. It’s a recipe for disaster,” said Stefanos Manos a former conservative finance minister.
“Lucas is a thoughtful person, an honest guy, a clever person but he’s also very cautious … he’s going to want to lay down his terms and as they stand I very much doubt that he will accept. I don’t think for a moment he is willing to be a puppet PM.”
The confusion may well mean that nothing is decided before this evening, when markets in Europe have already closed and Wall Street could be getting edgy.
So in short — Greece is far from getting a government that will guarantee political stability.
1.05pm: What a dramatic few hours in the European debt crisis. Here’s a round-up of the key events so far:
• Silvio Berlusconi has denied planning to resign today. The embattled Italian PM insisted that he remains in charge — apparently after talks with his children
• Italy’s borrowing costs have spiked alarmingly, suggesting that the country could soon be dragged deeper into Europe’s financial crisis. The yield on 10-year Italians debt hit 6.66% this morning – devilishly bad news for Berlusconi?
• Greece remains in political limbo, as talks continue over the creation of a unity government. George Papandreou, and his old rival and US college friend Antonis Samaras, are locked in negotiations
• France promises more austerity. Another €7bn of tax rises and spending cuts announced today
12.34pm: Has the mystery of Berlusconi’s apparent about-turn been solved?
From John Hooper again:
One of the two senior journalists behind the rumours of Berlusconi’s departure has just tweeted that the media magnate changed his mind after a lunch in Milan with his children by his first marriage (both of whom hold key posts in his business empire) and the chairman of his Mediaset TV empire. What other prime minister would be doing that at a moment like this?
Franco Bechis, who is the deputy editor of Libero, wrote on Twitter that Berlusconi would be challenging “even his own people on [the basis of] the text of the ECB letter”.
That is a reference to the humiliating missive Jean-Claude Trichet and Mario Draghi sent the Italian government back in the summer, detailing the reforms they expected of it. Turning it into the standard under which Berlusconi rallied his troops to the good fight would certainly require some chutzpah. But then he has never been short of that!
In another amusing development, Silvio Berlusconi appears to have updated his Facebook page to deny he is planning to quit. His most recent entry now reads: “Le voci di mie dimissioni sono destituite di fondamento” (“The rumours of my resignation are groundless”).
Mark Twain would approve.
12.19pm: This looks like being a day of wildly contradictory rumours and denials. Fabrizio Cicchitto, Berlusconi’s leader in the lower house of parliament, has now DENIED that the media tycoon is to resign.
I spoke a short while ago with prime minister Berlusconi who told me that the rumours of his resignation are without foundation
Stock markets are sliding back as I type, while Italian bond yields are rising again (we’re back over the 6.6% mark – a bad sign).
From Rome, John Hooper informs us that Berlusconi flew this morning to Milan following a late-night pow-pow with some of the leading figures in his coalition:
TMNews, an Italian news agency, is quoting sources in his party as saying that he will hold a meeting later with Umberto Bossi, the leader of the Northern League, the junior partner in his right-wing condition.
Meanwhile, the pressure on him is mounting. The mayor of Rome, Gianni Alemanno, just appealed to Berlusconi not to try to “scrape by”.
But – and this is an important point for the markets – the leader of one of the opposition parties, Pier Ferdinando Casini of the Union of the Centre (UDC), is reported to be ready to join a new government led by Berlusconi’s right-hand man, Gianni Letta. So things might not change quite as much as might be assumed.
Assuming they change at all…..
12.09pm: The escalating crisis in Italy comes as Europe’s finance ministers prepare for two crunch meetings in Brussels.
Finance ministers from across the euro area will gather at 17:00 CET (4pm UK time), with the full Ecofin Council group of European ministers due to meet at 09:00 CET (8am UK time) on Tuesday.
My colleagueDavid Gow, who is racing to Brussels from Athens, points out though that the levers of power are really in the hands of a third, more secretive group:
GdF used to stand for Gaz de France (the state-owned gas group now locked in fusion with utility company Suez). Now it stands for Groupe de Francfort or Frankfurt Group, an ad hoc, entirely unaccountable cabal of Sarkozy, Merkel, Juncker, Draghi, Barroso, Van Rompuy, Rehn and, the real powerhouse, Lagarde.
It was formed at the October 19 Mozartfest in Frankfurt’s Alte Oper to say goodbye to Trichet as president of the ECB. This octet controls, or think it does, the eurozone and – memo to Dave and George – the EU. To whom do they report on their talks, say, with Obama or Wen Jibao?….
The group should not be confused with the Frankfurt School: the philosophers Adorno, Marcuse, Horkheimer et al who mounted a sustained critique of American cultural imperialism in the 1960s. Times change.
11.55am: Berlusconi has survived so many challenges before., so why is this time different?
John Hooper explains:
The timing of any resignation by Silvio Berlusconi is tied up with tomorrow’s expected vote on the 2010 public accounts.
Their rejection by the lower house of parliament, the Chamber of Deputies, is what prompted the last Italian crisis in mid-October. President Giorgio Napolitano, the head of state, is pressing for the accounts to be approved because, otherwise, Parliament cannot give the thumbs-up to the austerity packages (plus amendments) okayed earlier this year.
But if Berlusconi were to resign before the vote were taken, that could block further action by parliament.
11.30am: Rome correspondent John Hooper has full details of the speculation that Silvio Berlusconi’s long occupancy on the prime minister’s chair may soon be over:
The origin of the rumours is a comment by Berlusconi loyalist and confidante Giuliano Ferrara, the editor of the daily Il Foglio. On its web site, Ferrara says that it is clear “that Berlusconi is about to step aside. It is a matter of hours, some say even of minutes.”
Another journalist close to the Italian prime minister, Franco Bechis, deputy editor of Libero, tweeted that an overnight summit of coalition politicians ended with the understanding that by the end of tomorrow Berlusconi would announced his resignation and propose a government headed by his right-hand man, Gianni Letta.
The rumour continues to cheer the financial markets, with most stock markets off their lowest points.
As Jamie Chisholm, the FT’s global markets commentator tweets, that’s one more indignity for Berlusconi.
@FTGlobalMarkets: Embarrassing for a CEO when his/her company’s share price jumps when they go. Mr Berlusconi’s mooted departure is seeing the WORLD rally!
11.25am: Breaking news from France. Europe’s second largest economy has just announced a new round of austerity measures, including an extra €7bn of savings and tax rises for 2012, rising to €11.3bn in 2013.
The total package will be worth €65bn by 2016.
The measures include:
• Raising the French retirement ages to 62 in 2017 — a year earlier than planned.
• A temporary 5% increase in company taxation
• Hiking the lower VAT rate to 7%, from 5.5%
France has previously planned around €12bn of savings next year, but clearly felt this was not enough.
The new measures could be controversial – a year ago, more than one million people took to the streets to protest at Nicolas Sarkozy’s reforms to the pensions system.
11.05am: Rumours are sweeping Italy, and beyond, that Silvio Berlusconi might be forced to resign today.
The speculation, which is being reported in several Italian media outlets, has sent the country’s main stock market — the FTSE MIB — rallying by nearly 2.5%.
Italian government bonds are also recovering, with the yield on the 10-year debt down to 6.567%.
My colleague in Italy, John Hooper, points out that the Il Corriere della Sera newspaper only gave Berlusconi a 1 in 20 chance of surviving this crisis, after his interior minister admitted that the government had “perhaps” lost its majority in the lower house of parliament.
More as we get it….
10.47am: Italian 10-year bond yields have continued their alarming climb this morning, hitting a new euro-ero high of 6.67% in the last hour.
As we reported earlier, Italian yields (the interest rate on its debt), has been rising alarmingly this morning on fears that the political crisis in Rome is about to get a whole lots worse).
The word in the City is that the European Central Bank has, once again, begun buying up Italian debt in an effort to drive yields lower. Little evidence of success yet, though.
10.29am: One interesting element of the talks between outgoing prime minister George Papandreou and opposition leader Antonis Samaras is that the two men have been rivals, and sometimes friends, for decades.
Our Athens correspondent, Helena Smith, points out that Samaras has much in common with Papandreou on a personal level. The two men, though (pictured below at Amherst College, Massachusetts, in the 1970s where they were room-mates) have a very different political outlook:
Samaras doesn’t drink, he doesn’t smoke, he feels as comfortable speaking English as he does Greek and like Papandreou was born into a family of privilege and pedigree. Both men attended the same school and universities in America, hung out with the same people, reputedly shared the same girlfriends and now live in Athens’ affluent northern suburbs.
Just like Papandreou, Samaras has also had to resurrect his party from the ashes of crushing electoral defeat.
But the similarities end there.
While Papandreou is a progressive socialist, sixty-year-old Samaras is a hard-core fiscal conservative with nationalist views. The Harvard-trained economist is the first to say that despite their past friendship, he has nothing in common with Papandreou’s outlook on life, his policies and politics – – not least the leader’s “slavish” endorsement of the recession-inducing austerity measures demanded in return for the aid Greece so desperately needs from the EU and IMF.
Personally, we reckon Papandreou wins the points for coolness (although it doesn’t help that Samaras is hovering, almost invisible from the neck down).
Alan Beattie of the Financial Times, though, has another view on Papandreou….
10.19am: Speculation over the identity of Greece’s next prime minister is rife this morning.
The current front-runner appears to be Lucas Papademos, the 64-year old former vice-president of the European Central Bank. Greek media reckon he could be appointed within hours.
Papademos left the ECB in May, and has since been offering informal advice to Papandreou.
Papademos also served as the governor of the Bank of Greece for almost eight years, from October 1994 to May 2002. This means he was at the helm when the country joined the euro on January 2001 — a decision described as ‘mistake’ by Nicolas Sarkozy last month.
9.41am: Finland’s prime minister just ratcheted up the pressure on Italy and Greece.
PM Jyrki Katainen told a conference in Tampere, a city in the south of Finland, that there is significant danger of a Eurozone country defaulting. Further more, the financial markets are behind the curve.
From his speech:
“The very real risk of default has not been priced in.”
Katainen also blamed the crisis on countries failing to follow Europe’s own rules and treaties.
9.03am: The alarming rise in Italian bond yields has triggered a deeper selloff in the stock markets, with the FTSE 100 now down 76 points, or 1.4%, at 5448.
The Italian stock market is suffering more – losing 2.4%, while Spain’s Ibex has tumbled by more than 3%.
8.34am: This should get Silvio Berlusconi sweating — Italian bond yields have soared to their highest levels in 14 years this morning.
The yield (or interest rate) on a 10-year just hit 6.66% – which, according to Reuters data, it its highest point since 1997 (when Italy was suffering another financial crisis) – from 6.353% overnight.
That is a huge move in the context of an average day in the bond markets. For context, 6% is generally seen as the start of the ‘danger zone’ where the cost of borrowing becomes prohibitively expensive (although the Bank of Italy argues that it can cope with 8%).
Italian bond yields have closed above the 6% mark for the last six days, despite the European Central Bank buying up tens billions of euros of Italian debt last week.
The steady rise in Italian bond yields is alarming the City. As Gary Jenkins of Evolution Securities explained this morning:
As calls grow for Silvio Berlusconi to step aside, he faces a key test of his leadership on Tuesday with members of the lower house of Parliament due to vote on public finances.
There has been a lot of speculation that a different leader would lead to a sharp retraction in Italian bond yields. That might well be the case in the short term but considering the starting debt position, the economic outlook and the general lack of confidence in Italian debt it promises to be a challenging period of time for any Italian leader.
Last Friday, Berlusconi denied that the Italian economy as in trouble, pointing out that its restaurants remain full.
Jenkins is unconvinced:
Unfortunately while their leisure industry might be doing well nobody is particularly interested in buying their bonds…
8.22am: French president Nicholas Sarkozy is expected today to take significant austerity measures to rein in the country’s deficit, and ensure that the debt worries hanging over the eurozone periphery do not spread towards the centre.
A series of newspaper reports over the weekend have sketched out what the cuts, or tax hikes, might involve. The move to a higher retirement age in France of 62 will be brought forward to 2016 or 2017, rather than 2018. Automatic rises in welfare benefits could also be hit, Le Figaro has suggested, while there could be a rise in VAT in certain areas. Large companies could face a higher tax rate, meanwhile.
In recent months France’s credit rating has come under pressure. But any cuts are politically as well as economically risky for Sarkozy, six months away from an election.
Prime Minister Francois Fillon will announce the new measures at 11am.
8.14am: European stock markets have opened, and shares are falling.
The German Dax fell 1% at the start of trading, with France’s Cac and the Italian FTSE MIB both losing around 1.2%.
In London, the FTSE 100 is down 55 points at 5471, a fall of almost 1%.
This is the first time that European markets have been trading since the Greek confidence
vote, which the government won, but there’s no sign of a relief bounce.
Terry Pratt of IG Markets argued that Papandreou’s resignation was at best a “mixed blessing” for markets.
The clock is now very much ticking towards the big interest repayment that’s due on Greek bonds on December 19th, so the unity government needs to get the austerity measures ratified to ensure the release of the next tranche of bail out funds.
7.55am: Here’s a rundown of the key events today:
The negotiations between George Papandreou and Antonis Samaras over Greece’s new unity government resume this morning, with the name of the next prime minister expected to be announced before the end of the day.
We are expecting details of French austerity measures – reports over the weekend suggest €8bn of cuts/tax hikes. The announcement is expected at 11am. The cuts come on top of €12bn of savings announced only three months ago.
The eurozone’s finance ministers are meeting in Brussels later today to agree the technical details of the operation of the ramped-up €440bn EFSF.
The Italian centre-left opposition is preparing a vote of no confidence in prime minister Silvio Berlusconi. The media mogul faces a difficult vote tomorrow on the public finances – we will be following developments today ahead of that vote.
The Eurozone Sentix index, an indication of investor sentiment in the Eurozone, is out at 9:30am GMT.
There are few big US corporate announcements this week. Cisco reports on Wednesday and Disney on Thursday, but we will as ever have an eye on the US markets to see how events in the eurozone are impacting globally.
7.45am: ….And in Italy, Silvio Berlusconi remains under mounting pressure as more MPs defect or demand his resignation. He has just one day left to shore up support before a vital budget vote on Tuesday.
Eurozone finance ministers will be watching the political situation in Athens and Rome closely, as they meet in Brussels later today to discuss the crisis in Greece and the EU’s bailout fund.
As usual, we’ll bring you the latest news, reaction and analysis. Let us know what you think too.
7.45am: Good morning, at the start of a new week that will probably be dominated by the eurozone debt crisis.
In Greece, political leaders will resume their negotiations over the creation of a new unity government. Prime minister George Papandreou and opposition leader Antonis Samaras are due to meet again today — having failed to agree a successor to Papandreou last night. The Greek president, Karolos Papoulias, has said that a new prime minister will be named today — paving the way to the implementation of the bailout deal agreed last month….