Nicolas Sarkozy and Angela Merkel before their meeting at the Elysee palace on Monday. Photo: Remy de la Mauvinere/AP
Welcome back to our live coverage of the eurozone crisis. By Esther Bintliff on the world news desk in London, with contributions from FT correspondents around the world.
This post should update automatically every few minutes, but it may take longer on mobile devices. All times are GMT.
19.40: So, after a relatively quiet morning, this afternoon and evening have proved to be a bit of a rollercoaster.
- First, Nicolas Sarkozy and Angela Merkel surprised everyone by announcing they had reached “comprehensive agreement” on a new set of fiscal rules ahead of the EU summit later this week. Of course we knew they were going to meet, but to be honest, we hadn’t expected them to say very much in public at this stage. So stock markets rallied, bond yields fell and suddenly it looked like a resolution to the eurozone crisis might be in sight…
- Then, just when you thought it might be safe etc etc, this story broke. In brief: Standard and Poor’s has warned Germany and the five other triple A members of the eurozone that they risk having their top-notch ratings downgraded as a result of deepening economic and political turmoil in the single currency bloc. The US ratings agency is poised to announce later on Monday that it is putting Germany, France, the Netherlands, Austria, Finland, and Luxembourg on “creditwatch negative”, meaning there is a one-in-two chance of a downgrade within 90 days.
Understandably, investors took fright, and stock markets pared many of the gains made earlier in the day. There will be more news on this story tonight – see FT.com for all the latest. In the meantime thanks for reading, and for all the comments. Read more
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. Read more
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
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.
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 Read more
Welcome back to our continuing coverage of the eurozone crisis. In the early hours of the morning, eurozone leaders emerged from their summit in Brussels with a deal designed to stem the sovereign debt crisis. The markets seem pleased but big questions on the details remain. We’ll bring you reactions, news and commentary as we get it throughout the day.
All times are London time. By Tom Burgis on the news desk in London, with contributions from FT correspondents around the world.
18.34: It’s time to wrap up the live blog for today. But keep reading FT.com through the evening for:
18.13: Der Spiegel has a nice tale about whether or not Angela Merkel did in fact apologise to Silvio Berlusconi for appearing to smirk when asked publicly if she still had faith in his leadership.
18.07: Chatham House has just published a paper arguing that international debt bailout systems are ill-equipped to handle any further instability.
“As the problems in the eurozone deepen and threaten to spread globally, action is required to strengthen financial safety nets beyond what was agreed by EU Heads of State on 27 October 2011.”
Read the full report by Stephen Pickford, former managing director at the UK Treasury and former executive director at the IMF.
18.00: An evening update of the day’s developments:
- At the end of trading in Europe, the FTSE Eurofirst 300 finished 3.69 per cent higher for the day at 1,020. US stocks rose too, with GDP numbers that matched expectations adding to a positive reception for the EU’s moves
- Despite the ebullience in equities markets, concerns remained over soveriegn debt in the eurozone. Italian government bond yields first sank to 5.7 per cent, before rebounding to 5.9 per cent, near their euro-era highs
- Questions remain over the details of the eurozone deal, notably over the terms of the new bonds that will replace existing Greek debt as part of the agreed 50 per cent “haircut” (see 13.17), how banks will go about raising new capital and where the cash to fund the various eurozone plans will come from
- European officials are keen to involve China and other Bric nations in a fund to buy eurozone debt, though here too there are no firm plans yet
Welcome back to our continuing coverage of the eurozone crisis as we head into the evening. Europe’s leaders have gathered in Brussels to try to deliver a solution to the sovereign debt crisis. It has been a nervy day in the markets and national capitals – all of which you can read about on our live coverage from earlier on. Tonight we should discover whether Europe’s leaders can overcome their differences and chart a course towards recovery or whether they will once again fail to reach a deal. We’ll bring you news and commentary as we get it.
All times are London time. By Tom Burgis on the news desk in London, with contributions from FT correspondents around the world.
22.38: We’re going to wrap up our live coverage from London now. But fear not, the FT reporters at the summit will not rest until we have an outcome from the evening’s second summit, of all 17 eurozone leaders. See ft.com for all the latest news.
It seems only right to give the final word on today’s developments to Justin Timberlake, whose new film, In Time, has the strap line: “Tomorrow is a luxury you can’t afford.” Over the coming hours we’ll discover whether European leaders – and the markets – share that sentiment.
22.35: A quick recap on what we know so far
- The 27 EU leaders agreed a statement as per a leaked draft, fleshing out some headline details of how the bank recapitalisation will work
- Silvio Berlusconi’s letter to his fellow eurozone leaders included a commitment to raise the Italian retirement age to 67
- Nicolas Sarkozy will call his Chinese counterpart tomorrow in what seems to be part of efforts to win Chinese investment for a fund to buy eurozone debt
- US markets dealt with all of this pretty calmly, finishing the day in the black
Welcome to our continuing coverage of the eurozone crisis. Today’s summit in Brussels could, in years to come, be viewed as a turning point in the eurozone crisis. Or, it could be just one more extended meeting at which policymakers tried – and failed – to agree on a plan big enough to calm the storm in Europe’s sovereign debt markets. We’ll bring you news and commentary until the summit begins.
All times are London time. By Esther Bintliff and David Crouch on the world news desk in London, with contributions from FT correspondents around the world.
17.10: The summit is about to begin and we’re continuing in a fresh post: Eurozone crisis: the evening session.
16.45: A reminder of the timetable for tonight:
- 17.00 – 18.00 (London time): the leaders of all 27 EU member states meet
- 18:15 onwards: the summit of eurozone leaders begins
Statements and possibly a press conference are expected when the meetings close, but they will likely continue long into the night.
Stanley Pignal, Brussels correspondents, reports:
“EU leaders have been arriving for the first of tonight’s two meetings, which will involve all 27 member states before the eurozone-only leaders convene afterwards.
Welcome to our live coverage of the eurozone crisis, by Esther Bintliff and John Aglionby on the world news desk in London with contributions from correspondents from around the world. All times are London time.
Hopes for the unveiling of a “comprehensive plan” to resolve the eurozone crisis at this weekend’s summit of European leaders have been squashed this afternoon. “No agreements” will be made, officials told the FT, until a second summit, which will probably take place on Wednesday. Read more
Welcome to our continuing coverage of the eurozone crisis. All times are London time.
Curated by Esther Bintliff and John Aglionby on the world news desk in London, with contributions from FT correspondents around the world.
19.20: We’re wrapping up the live blog now but we’ll be back tomorrow for more fun and games – including, notably, the European Central Bank’s rate announcement and the swansong press conference of Jean-Claude Trichet. In the meantime, do follow us on twitter – we’re @ftworldnews – and of course at ft.com
19.15: How does one go about recapitalising a continent’s banks? Patrick Jenkins, the FT’s banking editor, and Gerrit Weismann, correspondent in Berlin, have put their heads together and come up with a very nice Q&A, which tells you how big the hole is, how recapitalisation might happen and what type of capital will be raised:
Consensus is now building in the markets that a European form of the Troubled Assets Relief Programme, or Tarp, that underpinned mandatory US bank recapitalisations in the wake of the 2008 crisis, is the best way to restore confidence…