Greece’s new government is plotting its next step after its European debt talks roadshow didn’t yield a breakthroughLatest: Greece and Germany draw battle linesUS earnings jump as job creation beats forecasts Greek Summary: emergency meeting on WednesdayVaroufakis “won’t accept old deal” 3.27pm GMT And more:#ESM #Regling: Once QE is implemented by the ECB in March, it will help the euro area economy return to normality.#Regling: We’ve only issued bonds in € but we’re likely to issue in other currencies. Investors will get wider menu to buy EFSF/ESM bonds 3.21pm GMT More eurozone bigwigs coming out with their advice to Greece, this time Klaus Regling, managing director of the European Stability Mechanism:#ESM MD #Regling in interview w/ Japan. newspaper Nikkei @nikkei and Nikkei Asian Review @NAR http://t.co/ZYeMSBSve5 pic.twitter.com/ti0DFCVzoh#ESM #Regling: #EFSF has disbursed over €140bn to #Greece, owns 44% of Greek debt, is by far Greece’s largest creditor#ESM #Regling: new Greek Governm/ may want to make some changes but I hope the reform process and fiscal consolidation continues#ESM #Regling: it would be a missed chance if new Greek government did not pursue reforms & let progress accomplished go to waste#ESM #Regling: if there is no agreement w/ new Greek Gov there will be no more money available but it’s too early to judge what will happen.#ESM #Regling: there was no spillover from Greek election to other € countries. We are now far better prepared for whatever crisis may come. 3.00pm GMT More from Reuters on the US comments on Greece:The United States told Greece through its ambassador on Friday to work cooperatively with its European colleagues and the International Monetary Fund and that Athens needed to push ahead with reforms.“Greece should continue to make administrative and structural reforms and exercise fiscal prudence,” the embassy said in a statement. 2.53pm GMT Meanwhile the US stock market has opened, and despite the futures predicting a hefty double digit rise on the Dow Jones Industrial Average after the blowout non-farm payroll numbers, it hasn’t turned out like that so far.The Dow is currently up just 11 points, as investors speculate the higher than forecast jobs and average earnings figures might prompt the US Federal Reserve to sanction an interest rate rise sooner than expected. Dr Harm Bandholz, chief US economist at UniCredit Research, said:In its latest Federal Open Market Committee statement the Fed upgraded its assessment of the labor market from “solid” to “strong”. Today’s employment numbers unequivocally vindicated this wording change. Given the fact that most FOMC members see the plunge in oil prices, which will push inflation rates even lower in the coming months, as a positive for the US economy, we remain convinced that the Fed continues to get closer to its first rate hike.Chair Yellen’s semi-annual monetary policy report before Congress later this month provides her with a good opportunity to prepare markets for further changes in the Fed’s rhetoric. 2.49pm GMT In the wake of the earlier meeting between Greek finance minister Yanis Varoufakis and a delegation from the US Treasury, Reuters has a snap outlining the view from across the Atlantic:06-Feb-2015 14:40 - ATHENS- U.S. SAYS GREECE MUST MAKE REFORMS TO MEET INTERNATIONAL OBLIGATIONS, WORK COOPERATIVELY WITH EU, IMF 2.44pm GMT Some confusion surrounding supposed comments from Eurogroup president Jeroen Dijsselbloem:https://twitter.com/wolfpiccoli/status/563706833408643072@J_Dijsselbloem says #eurozone govts 'won’t grant #Greece short-term financing agreement to keep afloat while renegotiating terms of support#Eurogroup Chief @J_Dijsselbloem Rules Out Bridge Loan Sought by #Greece - Bloomberg Business - http://t.co/RwJueyLSYn #Economy #EurozonePre-weekend posturing by Dijsselbloem and Athens about bridge loans/bridges. Despite the focus on bridges, neither side is constructive#Dijsselbloem's statement on #Greece not so clear apparently, not really what he meant, I am told. he said need to talk the programme first. 2.32pm GMT Cyprus’s bailout programme has also hit a hurdle.Its Troika of lenders have been unable to complete their latest assessment of its financial programme, because MPs voted last month to suspend a law to help banks to tackle bad debts.Given the further suspension of the effective application of the foreclosure framework, reaching staff-level agreement on the review was not possible during this visit. The teams look forward to a timely completion of the review as soon as the conditions are in place for a positive conclusion. Another Troika-acccident waiting to happen. 'No agreement possible'. Statement on Cyprus http://t.co/LGwt8dh1xs via @EU_Commission 2.25pm GMT Athens-based journalist Efthimia Efthimiou is hearing that the new Greek government fears it will “collapse” if it sticks with the old bailout promises.Acc 2 MoF sources, FinMin isnt going 2 sign the program in EG coz "govt will collapse. Will prepare our own program" #Greece via @capitalgr 2.15pm GMT Yanis Varoufakis has been working his phone inside the Athens parliament today.... 2.09pm GMT Back to Greece.... and the Athens stock market has now fallen 3% as another gust of gloom sweeps through the trading floor.That follows both sides taking a hard line ahead of next Wednesday’s eurogroup meeting. #Greece gov position in line w pre-election pledges. Syriza never implied they wld blink to Eurozone's positions. Confrontation was obvious.#Greece Athens stock exchange -3.32% now after this Reuters story re Greece-Eurogroup. It was -0.8% before that 2.04pm GMT November NFP revised up to 423K, December revised up to 329K, Jan beats estimates. So far so good. pic.twitter.com/09bjqT2pTu 2.02pm GMT Hike, hike, hike.....The dollar is STILL powering higher. 1.53pm GMT The dollar has surged on the foreign exchanges, as traders anticipate that the strong jobs report will prompt a US rate hike within a few months.Janeeeeeeet! 1.37pm GMT Instant reaction:Well, that was an unambiguously phenomenal jobs report. 1.36pm GMT Not got a Reuters terminal? No problem...All NFP numbers. pic.twitter.com/5GTprnUBHI 1.35pm GMT This strong jobs report raises the chances that the US Federal Reserve is going to start raising interest rates before too much longer. BOOOOOM 1.34pm GMT January jump in US jobs largest since Nov 2008 1.33pm GMT The US unemployment rate has inched up to 5.7%, from 5.6%, despite the strong job creation over the last three months.That indicates that more people came back to the labour market, as it strengthens.U.S. economy created 257,000 new jobs in January, unemployment rises to 5.7% 1.32pm GMT And it’s a blowout reading on earnings too -- average US earnings rose by 0.5% in January, much stronger than the 0.3% that analysts had predicted. 1.31pm GMT Breaking: The US economy created 257,000 new jobs in January, that’s a better reading than expected.And revisions to December and November’s data has added another 147,000 new jobs. Wow..... 1.20pm GMT Newsflash from Athens: Yanis Varoufakis has no intention of agreeing to anything based on the old bailout programme, at next Wednesday’s eurogroup.So says a government official, drawing the battle lines ahead of the extraordinary meeting. 1.13pm GMT OK, it’s nearly time for the final major piece of economic news of the week - the US unemployment report for January.Economists expect that around 234,000 new jobs were created last month. U.S. jobs forecasts per @ReutersPolls Consensus: 234k High: 290k Low: 190k Unemployment rate: 5.6% Average earnings: +0.3% 1.04pm GMT Finland’s government has survived a confidence vote over the Greek crisis:Finland's government prevails in confidence vote as opposition uses Greece as cudgel: http://t.co/BQyNChNhhM pic.twitter.com/F0Tadhk9GY 1.00pm GMT As feared, it’s been a quieter day than we’ve got used to in 2015. #Mustn’tGrumbleEurozone finance ministers have called an emergency meeting for next Wednesday night to discuss the Greek crisis. Germany wants Athens to turn up with a plan....So Varoufakis was refused entry to the Reform Club. Their loss. #London #Greece #eurozone-Εγω στην θέση σου θα του έριχνα ένα άπερκατ του Σόιμπλε -Ασε με Πάνο διαβάζω κομισάριο στο κάπιταλ pic.twitter.com/Pas9sdNSc1Goldman Sachs: Crucial days for #Greece banks as the political situation is set to unfoldGoldman Sachs expects #Greece to remain in the Euro area although only after a period of potentially intense political tensionGS: The risk of an economic & financial accident has increased, given the more confrontational stance of the new govt #GreeceUK goods trade deficit last yr was the biggest in more than 300yrs. Here's data back to 1870 http://t.co/X27DkCZc9C pic.twitter.com/PTzQWyPW6c 12.59pm GMT Yanis watch: Here’s Greece’s finance minister arriving at the finance ministry in Athens, to meet senior US Treasury official Daleep Singh and Lea Bouzis. 12.43pm GMT Italy’s finance minister, Pier Carlo Padoan, has declared that eurozone finance ministers will aim for a ‘unified position’ on Greece at next Wednesday’s extraordinary meeting.That’s via the MNI newswire, which reports that Padoan also identified political union as the eurozone’s “ultimate goal”.V interesting statement by Padoan. Implies that Eurogroup may come up w a unified position towards Greece and Varoufakis may end up isolated 12.30pm GMT The eurozone crisis is a conflict between countries, right? Wrong! It’s a conflict between economic sectors.So says economist Michael Pettis in a very thought-provoking blog post. He argues that it’s fundamentally wrong to focus on clashes between rich and poor, or efficient and inefficient, countries. Instead, it’s a class war. In fact, the current European crisis is boringly similar to nearly every currency and sovereign debt crisis in modern history, in that it pits the interests of workers and small producers against the interests of bankers. The former want higher wages and rapid economic growth. The latter want to protect the value of the currency and the sanctity of debt.One of the worst costs — for Germany — has been the lack productivity growth. For all the talk of Teutonic competitiveness, German labour productivity has grown at the meagre pace of just 0.6 per cent per year, on average, since 1998. Output per hour worked is actually lower now than it was in 2007. MUST READ summary by @M_C_Klein of Pettis on Eurozone, debt forgiveness & how blaming periphery misses the point http://t.co/KrzImBPTOsAlso, it's an amazingly refreshing analysis of Germany's role in all this http://t.co/KrzImC7uG0 pic.twitter.com/APDfXpfaqz 11.47am GMT Shocking news. Greece’s finance minister was apparently refused entry to London’s Reform Club this week.The Greek economist certainly impressed the hedgies and City types he addressed on Monday night. His two-hour speech received a standing ovation; his flawless English, “more eloquent than practically the entire British Cabinet”, said one person who met him. “Not the dogmatic Marxist he’s portrayed as.”But not everything went to plan on the visit. Lord Lamont tried to give a breakfast for his friend at the Reform Club, only to find that the perennially tie-less Varoufakis wasn’t allowed in. Lord Lamont tells City Insider: “They wouldn’t accept that his national dress was not a tie.” So they popped around the corner to the less formal Sofitel.Rare photo of Varoufakis wearing suit and bow tie - http://t.co/rX08Tp4WDl pic.twitter.com/yC9snH23V2Norman Lamont wanted to host Greek fin min @yanisvaroufakis at the Reform Club - but they wouldn't let him in http://t.co/0S8l0aPWrg 11.34am GMT British exporters have called for more help after the UK trade gap hit a four-year high.Britain’s trade deficit last year was the widest since the coalition came to power, dealing a blow to the government’s drive to rebalance the economy away from consumer spending.Official figures released on Friday, showing a trading deficit for goods and services of £34.8bn in 2014, will make disappointing reading for the Conservative party as it seeks to capitalise on its economic record ahead of May’s election. Despite a vow to revive manufacturing and raise exports, the trade deficit last year was the widest since 2010 as exports fell faster than imports. 11.20am GMT Germany want Greece to present a strategy for its debt problems to eurozone finance ministers on Wednesday, at the emergency Eurogroup meeting announced this morning.A German finance ministry spokesman told reporters that the Berlin government is “completely open what will happen after the end of the current bailout programme.”*JAEGER: GREECE SHOULD PRESENT PLANS BEFORE A FEB. 11 MEETING - GREECE TO BE TOPIC AT G-20, NOT ON OFFICIAL AGENDA 11.10am GMT Heads-up. A protest rally in support of Greece has been called in Barcelona tonight:Solidarity with Greek people in #Barcelona, against the ECB blackmail to #Greece Today at 7pm #CatalunyaAmbGrècia pic.twitter.com/i6EvO6mKHY 11.02am GMT Meetings are about to begin in Athens between finance minister Yanis Varoufakis and team from the US treasury Daleep Singh, deputy assistant secretary for Europe & Eurasia. 10.53am GMT Finland’s government faces a vote of confidence this lunchtime over the Greek debt crisis.The vote was called by The Finns, the anti-bailout party, which demands answers from prime minister Alexander Stubb over the issue. Yesterday, Stubb vowed to help work through the crisis to save the common currency.The sun is shining in #Helsinki. Spring in the winter air. Next a vote of confidence on Greece. #politics #eduskunta 10.49am GMT Human rights lawyer Zoe Konstantopoulou has become the youngest politician to hold the post of Greece’s parliamentary speaker, and the second woman in close to 200 years.The centrist To Potami party lambasted Syriza for proposing that she stand for the post - one in which diplomatic skills are seen as essential. “Instead of choosing an individual that can bring about accord, the perennial protagonist of parliamentary squabbles was selected instead,” it said when her nomination was announced last week. #Greece's new parliamentary speaker Zoi Konstantopoulou, a 38-year-old lawyer elected in central Athens for #Syriza pic.twitter.com/OPrglGvicc 10.30am GMT Back in Greece, Zoe Konstantopoulou has been elected as parliamentary speaker with a record number of votes - 235, out of 300 MPs in total.zoe konstantopoulou vows to uphold and enforce parliamentary rules. ie no more omnibus bills. 10.11am GMT It’s official -- Eurozone finance ministers will gather in Brussels next Wednesday for a special meeting on the Greek crisis [as flagged up earlier]Extra #Eurogroup on #Greece on Wednesday 11 feb, start 17.30 in Lex-building. 9.53am GMT After a cautious start, Greek bank shares have headed south this morning as the uncertainty over its bailout programme hits confidence again.Financial stocks are leading the fallers on the Athens market, with National Bank of Greece shedding over 5%. Mr Schauble continues to insist Greece abide by the troika’s restructuring plans, which seems a very remote possibility given Syriza’s express opposition to those arrangements. Compromise is a long way off and the renewed slump in the share prices of the Greek banks seems wholly logical. 9.42am GMT So much for rebalancing the UK economy -- the trade deficit has hit a four-year high.Total #trade deficit widened to £34.8bn in 2014, largest deficit since 2010 when deficit was £37.1bn http://t.co/fIRjKmM2eS*U.K. 2014 GOODS DEFICIT 120 BLN PNDS, WIDEST ON RECORD 9.33am GMT And a secret vote to elect Zoe Konstantonopoulou, a lawyer by training and one of Syriza’s leading lights, as Greece’s parliamentary speaker is now underway. She is expected to easily be catapulted to the post.“I bumped into Zoe in corridors of parliament yesterday. She was excited.Asked if she felt Greece was experiencing a historic turning point, she shot back: “All the way.’”parliament now voting for its president aka speaker of the house. syriza candidate zoe konstantopoulos broadly supported 9.30am GMT Over in Athens, Helena Smith reports that parliament has just sworn in finance minister Yanis Varoufakis.Deputy foreign minister in charge of international investment Euclid Tsakalotos (who was educated in London [St Paul’s, no less] before going up to Oxford), has also been sworn in. 9.24am GMT Sounds like the rumours were true. Two EU officials have told the WSJ that eurozone finance ministers will hold a special meeting about Greece on Wednesday. That’s one day before European leaders hold a two-day summit.Gabriele Steinhauser says:The talks are supposed to free EU leaders, who are meeting in Brussels on Thursday, from having to delve into the details of Greece’s financial problems.Prediction: Greek-German chicken game won't be resolved at Feb 11 Eurogroup/Feb 12 summit. Gaps too big. 9.17am GMT Greek newspapers are dominated, of course, by yesterday’s meeting in Berlin.Enikos.gr have rounded up the details:“War of nerves” is the headline in Ethnos referring to the ups and downs of Greece’s negotiations as well as the backstage politics taking place. Varoufakis wants 67% of the existing bailout programme and 33% reforms, says Eleftheros Typos.'They couldn't even agree...to disagree' - Greek press review - http://t.co/0npVTaLRiY pic.twitter.com/60qhKOsOts 9.05am GMT The Greek parliamentary wheels are turning...Election of new parliament speaker to begin in a few minutes #Greece 8.53am GMT Traders in Athens made a cautious start this morning, pushing the ATG index up around 1%.Bank shares, which have been through a stomach-churning ride in recent days, are inching higher; Eurobank has gained 4%. 8.42am GMT The FT has some good news for Greece - apparently the ECB’s governing council was split over Wednesday night’s contentious decision to ban the use of Greek debt as collateral for cheap loans.Frankfurt correspondent Claire Jones reports that national central bank chiefs were fairly evenly split – but under the rolling voting system Greece, Cyprus, Ireland and France didn’t get a vote."@nickkounis: FT reports ECB was split on banning Greek debt as collateral. Reduces risk that ELA will be blocked http://t.co/7MZv659Ik0 8.30am GMT Geopolitical worries have helped to push most European stock markets into the red this morning, with the FTSE 100 down around 0.4%. 8.17am GMT Over in the Wall Street Journal, Stephen Fidler says Europe is pondering how much Greece really means to them.One question European policy makers are asking is whether Mr. Tsipras represents a break to [Greece’s] clientelistic tradition, or whether he will be guided by the business-as-usual principle that “it’s our turn now.”If the former, Greece’s eurozone partners may be more inclined to accommodate its requests provided the government signs up to meaningful reform. If the latter, they may eventually be inclined to take the risk of casting it adrift. The eurozone’s big beasts seem determined to force a quick resolution, rather than accept Syriza’s timetable.Optimists might reflect that Germany, as a negotiating tactic, was always going to make the threat of Grexit, or Greece’s exit from the euro, feel real. Does Germany really want to be seen as responsible for driving Greece out of the eurozone? Probably not. But the pressure being applied on Syriza is hard and has arrived, courtesy of the ECB, earlier than expected.It was not quite Ill Met by Moonlight , the film in which second world war commandos and Greek guerrillas help kidnap a Wehrmacht general. But it was nonetheless dramatic when the Greek and German finance ministers finally met for a showdown in Berlin over the Greek debt crisis.Like the best movie stars, Wolfgang Schäuble and Yanis Varoufakis kept the crowds waiting. And when they finally appeared at their press conference after two hours of talks it was to announce that they were as far apart as ever on how to refinance Athens once its rescue programme expires at the end of this month. If they agreed on one thing, it was that this particular eurozone thriller still has a long way to run. 8.05am GMT Greece and its lenders may be inching towards a deal, reckons Nick Kounis, head of macro & financial markets research at ABN Amro. Here’s a flavour of his research note this morning.Despite this uncomfortable meeting, a deal has recently become more feasible. Greece previously rejected the idea of a Euro-IMF adjustment programme. Yet at the press conference, the Greek finance minister said that the country was looking at ‘a bridging programme’ to tide it through until a new deal was struck. He also said he agreed with 70% of what was in the old programme.We think a new deal will have three pillars. First, a new reform programme, with more emphasis on tackling tax evasion and vested interests, and less on welfare and social spending cuts. Second, debt relief for Greece, perhaps in steps, conditional on reform progress. Help on this front was promised to Greece in November 2012 by the Eurogroup. Third, a lower primary surplus target, which would fit with the lower level of debt and allow less aggressive fiscal consolidation. All these elements look politically feasible. 7.59am GMT Yesterday’s press conference between Yanis Varoufakis and Wolfgang Schäuble made it to the front page of two UK papers this morning:FT: Merkel and Hollande in Putin talks to break Ukraine deadlock #tomorrowspaperstoday #BBCPapers pic.twitter.com/5tjYXhYDhUGUARDIAN: Solution to crisis is in your hands, Germans tell Greece #tomorrowspaperstoday #BBCPapers pic.twitter.com/f8wqmLhm1n 7.55am GMT Good morning, and welcome to our rolling coverage of the eurozone crisis, the world economy, business and finance.While it seems funding will continue to flow in the near term, there will be fears Greece is at risk of plunging into a fresh political crisis should the government not appease the masses with an ideal result from the negotiations. Recent steps also seem to imply European leaders are looking to put more pressure on Greece and accelerate the negotiation process. Continue reading...
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