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.
Welcome back to our continuing coverage of the eurozone crisis.
By Esther Bintliff and John Aglionby in London and Anjli Raval in New York, with contributions from correspondents around the world. All times GMT.
It was decision day on the Greek bail-out. After so many twists to this saga here is a round-up of what came out of the meeting of eurozone finance ministers after more than 13 hours of talks, courtesy of Peter Spiegel and Alex Barker of the FT’s Brussels bureau.
- A long-delayed €130bn second bail-out for Greece was agreed on.
- Further “haircuts” were pushed for after a confidential debt analysis showed that the previously-negotiated deal would cost €136bn and would only lower Greek debt to 129 per cent, rather than 120 per cent, of economic output by 2020.
- Although Greek bondholders agreed in October to accept a 50 per cent cut in the face value of their bonds, they will now be offered a “voluntary” deal with a haircut of 53.5 per cent.
- That will get Greek debt levels to 120.5 per cent by 2020, close to the IMF’s goal for long-term debt sustainability.
- The euro rose 0.8 per cent to 1.3257 on the news, before falling back to 1.3263 at 4.20 GMT.
Dado Ruvic, Reuters
Welcome to our continuing coverage of the eurozone crisis.
All times GMT. By Tom Burgis and Esther Bintliff in London, and Anjli Raval in New York, with contributions from FT correspondents around the world.
23.13 European finance chiefs deferred ratifying a rescue package for Greece, pressing the government in Athens to put a newly struck austerity plan into action. Here are some closing remarks after talks this evening where no final decision on the deal was made:
- Greece is in “the middle of the road,” and much work remains on its recovery, the country’s prime minister Lucas Papademos said in a statement.
- Greece must pass its latest austerity package into law and identify €325m in spending cuts before euro-area governments endorse a second bailout for the country, Luxembourg prime minister Jean-Claude Juncker said after chairing the emergency meeting of euro-area finance ministers. “Despite the important progress achieved over the last days we didn’t yet have all necessary elements on the table to take decisions today,” he said.
Christine Lagarde, IMF managing director said: ”There is clearly some very encouraging news coming out of Athens and … after the very heavy duty work that has been done lately, I think it’s positive.”
Mario Monti arrives to unveil his new government at the Quirinale Palace in Rome. Photo: Alberto Pizzoli/AFP/Getty Images
Welcome back to the FT’s rolling coverage of the eurozone crisis. By Esther Bintliff and John Aglionby on the world news desk, with contributions from correspondents around the world. All times GMT.
Europe’s two new technocratic prime ministers consolidated their respective grips on power today. Lucas Papademos in Greece won a confidence vote in parliament, while Mario Monti, his Italian counterpart, announced his new cabinet and was sworn in as prime minister.
19.03: We’re going to wrap up the live blog for tonight, but you can read lots more on FT.com. Here’s a quick update on today’s events:
- In Greece, prime minister Lucas Papademos won an overwhelming vote of confidence in his new interim government – 255 votes in favour, 38 against
- Charles Dallara, managing director of the Institute for International Finance, is about to meet with Mr Papademos (see our 12.15 update). The IIF has been negotiating with Greece on behalf of investors holding Greek sovereign debt
- In Italy, Mario Monti unveiled his new technocrat cabinet (see our 12.52 update, and this article) and said he would serve as both prime minister and finance minister. ”We finally have a competent government, not one of dwarves and ballerinas,” declared Antonio di Pietro, former anti-graft magistrate and head of the Italy of Values party.
- Italy’s statistics agency spooked the market by announcing that it wouldn’t be releasing preliminary Q3 GDP data
- The number of jobless in the UK reached 2.62m, a 15-year high, while the number of young unemployed topped one million for the first time since these records began in 1992
- In its November Inflation report the Bank of England revised downwards its growth and inflation forecasts, and prompted economists to predict that quantitative easing would be ramped up sooner than expected
- Mervyn King, the Bank of England governor, said he had “great sympathy” with the ECB in “not going around and buying all sorts of assets”
- Angela Merkel said Germany was prepared to “give up a little bit of national sovereignty” in the name of strengthening the wider eurozone area (see 13.44 update)
- Portugal passed its latest troika exam - or rather, the European Union and International Monetary Fund approved the disbursal of the next €8bn tranche of the country’s €78bn financial rescue package after concluding a second quarterly review of the the government’s progress with the bail-out programme (16.04 update)
- Italy’s 10-year government bond yield spent the day fluctuating around 7 per cent – and finally settling at that level, reports Dave Shellock on our markets team. Reported buying by the European Central Bank of both Italian and Spanish debt offered only limited support