bailout

Tom Burgis


Welcome to our live coverage of the eurozone crisis. We’ll bring you all the developments. By Tom Burgis and Ben Fenton in London with contributions from FT correspondents across the world. All times are GMT.

 

 

17.37: As the EU’s political leaders get down to talks, we are closing down the live blog for today, but it will be up again bright and early tomorrow to pick up on whatever is decided overnight. Meanwhile, elsewhere on FT.com you’ll be able to find coverage of the summit kept fresh by our sleep-deprived Brussels team.

17.29 More bleak news for the UK’s Triple A credit rating, via FT markets editor Chris Adams:

[blackbirdpie url="https://twitter.com/chrisadamsmkts/status/279275102162522112"]

17.24 More twists and turns in this tale of what said what to whom about the Italian elections at the centre-right EPP’s pre-summit meeting today (see 15.49 and 17.06).

Antonio Tajani, the Italian EU commissioner and a Berlusconi ally, is quoted by Italian news agency Adnkronos as saying that none of the leaders of the EPP “expressly asked Monti to be a candidate”.

“Everyone spoke well of Monti but no one wants to interfere.”

 Read more >>

Tony Barber

Greece is usually labelled the eurozone’s most reform-resistant economy, but perhaps that’s because Cyprus slips under most people’s radars, writes Tony Barber. Read more >>

Tony Barber

Add Poland to the list of European Union countries turned off by the incoherent, self-isolating policies of Britain’s Conservative-led government towards Europe.

First there was Germany. Chancellor Angela Merkel restricts her visits to the UK these days to the barest minimum. She has been lukewarm about David Cameron, the UK prime minister, ever since he pulled the Conservative party out of the pan-European centre-right European People’s Party (EPP), of which her Christian Democrats are a leading light.

Next came France. President François Hollande hasn’t forgotten how Cameron refused to meet him when he visited London on an election campaign trip earlier this year. Hollande is not inclined to do Cameron any favours on crucial issues such as the protection of British interests in a more deeply integrated Europe. Read more >>

Here are some articles that we can recommend today:

 

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Esther Bintliff

DANI POZO/AFP/GettyImages

Questions? Mariano Rajoy gives a press conference on June 10. Dani Pozo/AFP/GettyImages

The initial rally that greeted news of the eurozone’s €100bn emergency loan for Spanish banks petered out so quickly that you might have missed it altogether if, say, you’d had a lie-in on Monday morning. Clearly this was not how it was meant to be. The eurozone ministers who agreed the deal with Spain on a two hour conference call on Saturday must have hoped it would buy them at least a few full days of investor confidence. Instead, the yield on Spain’s 10-year bonds rose to a fresh euro-era high today. Here are some of the best news stories, analyses and comments on Spain’s so-called ‘bailout-lite’, from the FT and elsewhere: Read more >>

Alan Beattie

10-year Spanish bonds over past month - Bloomberg

Yields on Spanish 10-year bonds over the past month – Bloomberg

The market reaction to the Spanish bailout continues to validate the infallible eurocrisis trading rule of “buy on the summit, sell on the communiqué”. Why so negative, especially for Spanish sovereign debt?

As has been extensively pointed out, the Spanish rescue is a roundabout way to do a bank recapitalisation. Instead of taking direct equity stakes in the banks, the EFSF/ESM has had to lend via FROB, Spain’s bank rescue fund, thus increasing Spain’s sovereign debt load and raising all sorts of tortuously tricky questions about seniority.

So why do it this way? It’s the old story of policy architecture not reflecting the realities of the world economy. Read more >>

Alan Beattie

Could the IMF help bail out Spain? Tricky one. As goes the EU, so goes the IMF, only more so. Read more >>

Welcome back to our continuing coverage of the eurozone crisis.

After more than 13 hours of talks, a second bail-out for Greece was agreed early on Tuesday morning. We’ll be bringing you reaction to the deal throughout the day. All times are GMT. By John Aglionby, Leyla Boulton and Tom Burgis on the news desk in London.

We’re going to wrap up now since, after getting no sleep last night, diplomats and officials across the eurozone appear to be heading home while Athens remains abuzz with how it will meet its side of the second Greek bail-out. To recap today’s highlights:

  • Negotiators for private bondholders have backed the latest Greek deal forcing them to accept a haircut, but avoiding a disorderly default next month.
  • While the euro rallied, European equities closed down as the deal left investors unimpressed while US stocks neared a post-financial crisis high, driven by psychological thresholds .
  • Evangelos Venizelos, Greek finance minister, told an Athens press conference that the official offer on the bond swap would be made to bond holders by the end of this week. A government official added that the collective action clause, forcing holdout investors to participate, would be approved by parliament on Thursday.
  • Reaction on the streets of Athens was muted, with leftwing parties saying the deal was bound to make the recession worse. Aleka Paparriga, Greek Communist party leader, said “it’s not impossible that this crisis will turn into a disorderly default within months”.
  • Lucas Papademos, prime minister, convened a cabinet meeting to put the finishing touches to a pile of legislation that must pass in parliament by the end of February – if Greece’s credibility is to be maintained at the March 2 summit of European leaders, the next stage towards getting funding from the bailout agreed overnight.
  • Greek government officials confirmed that the country will hold a general election at the end of April or the beginning of May.

 Read more >>