EFSF

Esther Bintliff

The EU summit that begins on Thursday has enjoyed less fanfare – and less frenzied speculation over its potential outcomes – than many others. But don’t be fooled: it still matters. Here’s why.  

Alan Beattie

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

Tom Burgis

David Cameron arrives for the EU summit. Photo: Eric Feferberg/AFP

Welcome back to our live coverage of the eurozone crisis. By Tom Burgis and Kimiko de Freytas-Tamura on the  newsdesk in London, with contributions from FT correspondents around the world. All times are GMT.

A summit  in Brussels ended in deep division, with the UK refusing to back a new treaty for all 27 EU members and leaving the eurozone countries plus at least six others to forge ahead with a pact of their own to enshrine strict new rules on deficits and debt. It was meant to be the summit that would decisively chart a course out of the eurozone’s debt crisis. 

19.03 That’s the end of our live coverage today. We’ll leave you with a quick summary of the day’s developments. See FT.com for more news and analysis through the evening.

  • The European Union’s 27 leaders, minus David Cameron, struck a deal in the early hours to draw up a treaty by March that would bind them to strict new rules on debt and deficits, with automatic sanctions for countries that break them
  • The UK courted isolation as it refused to sign up to a treaty for all 27 members after David Cameron’s early-hours pitch for safeguards to protect UK financial services met a chilly reception from his counterparts
  • Markets were volatile before a tentative rally lifted equities in Europe and the US. The euro strengthened against the dollar but yields on Italian and Spanish bonds climbed once again
  • The IMF welcomed the European deal, which included €200bn for the fund to ensure it has enough cash to deal with any more fallout from the eurozone crisis, with Christine Lagarde, its head, saying she was “hopeful that others will also do their part”

 

eurocoasterWelcome back to our live coverage of the eurozone crisis. By Tom Burgis, Esther Bintliff and Kimiko de Freytas-Tamura on the  newsdesk in London, with contributions from FT correspondents around the world. All times are GMT.

Europe’s leaders gathered in Brussels for another crunch summit. Expectations are running high for a new grand bargain to restore sanity to the eurozone’s finances and chart a course out of the debt crisis. Also today:

  • The European Central Bank cut interest rates by a quarter point to 1 per cent, as expected, and announced that it would accept more forms of collateral and offer longer-term loans to try to protect the banking system
  • Mario Draghi, ECB president, poured cold water on hopes the central bank was poised to take more aggressive action
  • The European banking authority unveiled its updated stress tests of 70 banks, which tripled the capital shortfall for the German banking sector and pushed up the Europe-wide deficit from €106bn in October to €115bn now

20:15: We’re winding up the liveblog for tonight, but you can follow the rest of the action at FT.com and we’ll be back again on Friday morning. Thanks for reading and for all the comments. Bon courage!

19.54: BREAKING – Peter Spiegel, the FT’s Brussels bureau chief, has this scoop from the summit:

EU leaders have begun their late-starting summit, and they were given a 6-page draft of their conclusions at the start. According to people who have seen it, some of the most interesting new language is on the eurozone bail-out funds.

The current version says the existing €440bn fund, the EFSF, will continue running for another 2 years financing its current programmes – which would not be transferred to the new fund, the €500bn ESM.

That would free up the ESM’s resources, giving the eurozone significantly more firepower, with the two funds running in parallel.

The conclusions say the ESM would have its maximum €500bn lending capacity, regardless of how much the EFSF is committed to.

That could mean as much as €200bn in new “bazooka” weaponry.

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Tom Burgis

Welcome back to our live coverage of the eurozone crisis. By Tom Burgis on the  newsdesk in London, with contributions from FT correspondents around the world. All times are GMT.

18.25 That’s the end of our live coverage of the eurozone crisis today. We’ll be back tomorrow morning for a day that includes the ECB rates decision and Mario Draghi’s press conference, as well as the meeting of centre-right European leaders in Marseille ahead of the start of the EU summit in Brussels in the evening. And, just as the leaders tuck in their napkins for a working dinner, the European banking authority will unveil the details of which banks need to raise what capital.

We’ll leave you with a round-up of today’s developments. 

Tom Burgis

A tram passes the euro sign sculpture in front of the European Central Bank ( ECB) in Frankfurt, Germany. Photographer: Hannelore Foerster/Bloomberg

Welcome to our continuing coverage of the eurozone crisis. All times are GMT. By Tom Burgis, James Crabtree and John Aglionby on the news desk in London, with contributions from FT correspondents around the world.

The turmoil in the eurozone has taken a troubling turn in recent days, with anxiety spreading from Europe’s periphery to its “core” countries. Even as Italy’s Mario Monti readies his economic agenda to be presented today, investors are looking at France, the Netherlands and Austria with increasing unease and wondering whether the ECB might yet ride to the rescue. Over in Greece, today is the anniversary of 1973′s mass student protests – with demonstrators once more planning to take to the streets. And the bond markets are showing ever more strain, with today’s Spanish bond auction souring sentiment still further. 

Welcome back to the FT’s live coverage of the eurozone crisis and the global fallout. By Tom Burgis and David Crouch in London with contributions from correspondents around the world. All times are GMT.

Italian bond yields are back up over 7 per cent, and French and Spanish bonds are also under pressure. Stock markets are down across Europe. Meanwhile, Mario Monti – Italy’s prime minister designate – is battling to create a new government capable of dragging Italy out of the eye of the storm.

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17.59 We are wrapping up our rolling coverage – thank you for reading. But before we go, here is a quick reminder of today’s latest FT news and insights on the eurozone crisis:

  • Italian prime minister designate Mario Monti will see president Georgio Napolitano on Wednesday morning to present his new government, after he received the backing of outgoing premier Silvio Berlusconi’s People of Lilverty party
  • Following anaemic data on European economies today, more than three quarters of fund managers predicted Europe will slide into recession next year
  • Italy’s 10-year bond yield once again soared above the 7 per cent mark and French yields hit a record spread over German Bunds, causing global markets to wobble
  • US Treasury yields were close to unchanged as better-than-expected retail sales data offset safe-haven buying due to rising eurozone yields
  • The Austrian coalition government, faced with rising yields on government debt and a possible downgrade, decided to accelerate the pace of spending cuts
  • German frustration over Britain’s approach to the eurozone crisis was laid bare after a close ally of Angela Merkel accused the UK of selfishly pursuing its own interests just days before a meeting in Berlin between the German chancellor and UK prime minister David Cameron

 

John Aglionby

Silvio Berlusconi – shutting one's eyes won't make the problems go away. Image AFP/Getty

Welcome back to the FT’s coverage of the eurozone crisis. Curated by John Aglionby, Tom Burgis and David Crouch on the news desk in London, with contributions from correspondents around the world. All times are GMT.

Greece really is expected to get a new prime minister today – 48 hours later than expected. Italy, well who knows what’s going to happen there as bond yields surge and the EU’s economic inspectors arrive … And policymakers and financiers are becoming increasingly concerned about the impact of the crisis on global liquidity levels.

18.53 That’s it for our live coverage today. We leave you with a round-up of where we stand at the end of another turbulent day in Europe – and some cold hard numbers (and letters) for your bedtime reading.

 

Tom Burgis

Nicolas Sarkozy, French president and G20 host, blows a kiss to someone – presumably not the Greek prime minister (AFP/Getty)

  • Welcome back to the FT’s live coverage of the eurozone crisis. By Tom Burgis and John Aglionby on the news desk in London, with contributions from correspondents around the world. All times are GMT.

One issue dominates the agenda for as the Group of 20 leading economies enters its second and final: the fate of the eurozone amid the turmoil in Greece.

16.41: That’s it for the live blog for today. See FT.com over the coming hours for news and analysis on the G20 summit, Berlusconi’s woes and the outcome of tonight’s Greek vote.

16.31: Before we wind up the live blog, a brief re-cap of the day’s developments

  • The IMF is to monitor Italy’s progress on promises to reform its economy
  • Italian bond yields rose to fresh euro-era highs as Berlusconi said he was going nowhere
  • The Italian PM insisted his majority at home was “solid”, though it looks anything but
  • The G20 summit in Cannes ended with plenty of rhetoric urging the euorzone to get its house in order but no actual cash to help it do so
  • Any decision on boosting the IMF’s resources to help tackle the crisis was put of until when G20 finance ministers meet in February
  • Greek MPs are debating a vote of confidence in the government and will vote at midnight Athens time, 10pm London

 

Tom Burgis

 

Getty

Welcome back to the FT’s live coverage of the eurozone crisis. By Tom Burgis and John Aglionby on the news desk in London, with contributions from correspondents around the world. All times are GMT.

One issue dominates the agenda for today and tomorrow’s summit of the Group of 20 leading economies: the fate of the eurozone amid the turmoil in Greece.

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19.30: And what will tomorrow bring? Who knows. It’s day two of the G20 summit, the confidence vote in the Greek parliament and the US non-farm payrolls (monthly unemployment data) are announced.

Thanks for all your comments and tweets today – especially the song suggestions! For further updates from the late-night meetings in Cannes follow ft.com