Reporters briefed that European leaders poised to allow €750bn bailout fund to buy up bonds of crisis-hit governments
Talking about Greece, ekathimerini.com is reporting that the democratic left has agreed to join the coalition but won't join the cabinet. We'll have more from Athens later. The news site reports:
The central committee of Democratic Left, which is set to be the junior partner in a three-party coalition government, approved in the early hours of Wednesday a proposal for the leftists to support the new administration but not provide any members for its cabinet.
The meeting ended at 1.30 a.m. after 70 percent of members approved party leader Fotis Kouvelis's proposal that Democratic Left remain out of the cabinet. The party may ask for some figures who are ideologically aligned with Democratic Left, although not members, to join the government.
A nice literary allusion that could be applied to the G20, from the managing director of Greek market research company TNS ICAP.
"It's hard to communicate anything exactly and that's why perfect relationships between people are difficult to find." ― Gustave Flaubert
— helena chari (@helena_chari) June 20, 2012
Labour leader Ed Miliband has put out his reaction to the G20 plans, or lack of them, for the eurozone.
He is due to speak at the awards for consumer group Which? later, where he'll say that the summit had produced "no progress" on Europe or global employment and growth.
"This G20 summit should have marked a decisive shift towards jobs and growth, which is vital if we are to get deficits down. Unfortunately this has not happened because too many governments, our own included, seem to think more of the same is the answer.
"The result is a summit that appears to offer no progress for Europe and no global plan for jobs and growth. It is a summit of division when the world needs unity. And a summit of inaction when people, in Britain and across the world, are crying out for action."
In the debt markets, yields on Spanish 10-year government bonds - essentially the interest rate - have dropped below 7%. They are currently trading at 6.95%. The yield on Italian 10-year debt has dipped below 6% and is currently at 5.84%.
Quick look at the markets, which are struggling for direction.
UK FTSE 100: down 0.07%, or 4 points, at 5582
Germany DAX: flat
France CAC 40: up 0.1%
Spain IBEX: up 0.2%
Italy FTSE MIB: up 0.1%
The Bank of England publishes minutes from their last meeting this morning, which should shine a light on the debate over whether to introduce more quantitative easing.
Then later, the Federal Reserve will announce its interest rate decision. Markets are hoping that it will step in with a new round of Operation Twist, whereby the Fed sells medium-term bonds and uses the proceeds to buy longer-term bonds. Here's today's agenda:
• German producer prices for May: 7am
• Italy industrial sales for April: 9am
• UK Bank of England minutes: 9.30am
• UK unemployment figures for May: 9.30am
• Swiss ZEW business confidence for June: 10am
• US Fed interest rate decision: 5.30pm
• Angela Merkel meets Dutch PM Mark Rutte: 6.30pm
• Fed chairman Bernanke holds press conference: 7.15pm
In the debt markets, Germany is selling €5bn of 2-year treasury bills at 11.30am and the UK is selling £5bn of 6-month paper.
Good morning and welcome to our rolling coverage of the eurozone debt crisis.
There's some confusion this morning over what was agreed at the G20 summit in Mexico to prevent the euro from imploding. Patrick Wintour, who is reporting from the summit, says reporters were briefed that European leaders are set to announce a plan to buy up Italian and Spanish bonds with the €750bn bailout fund, while German officials said nothing had yet been decided.
The FT has a similar story saying Angela Merkel was non-committal about the idea on Monday night, adding: "Officials said Ms Merkel had subsequent conversations on the sidelines of the summit which led her interlocutors to believe 'she may be willing to do more'."
The Wall Street Journal says the Spanish prime minister is trying to persuade his peers to allow the €100bn bank bailout to be lent directly to the banks.
The official communique meanwhile was typically vague. Gary Jenkins of Swordfish Research notes:
What is apparent is that there was not the normal briefing where everyone gets the same story, which suggests that they still haven't got a clue what they are actually going to do.
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