All the latest economic and financial news, including coverage of the Ecofin meeting in Brussels and Greece’s ongoing bailout talks Germany will work with BritainGeorge Osborne says UK will be resolute and firmAustria criticises referendum planGreece ‘tapped IMF funds’ to pay IMFECB raises emergency liquidity ceiling for Greek banksPhotos: Chancellor meets fellow finance ministers 5.53pm BST The perilous state of Greece’s finances, despite the payment of €750m owed to the International Monetary Fund, along with a continuing sell off in the bond market put pressure on European markets again. A slight rebound in US Treasuries saw Wall Street recover some ground from its early falls, helping other markets come off their worst levels. The closing scores showed: 5.42pm BST A Reuters snap from the Greek cabinet meeting: 12-May-2015 17:40:34 - GREEK PRIME MINISTER TELLS CABINET THAT GREECE HAS DONE AS MANY STEPS AS POSSIBLE, TIME FOR LENDERS TO MAKE NECESSARY STEPS -GOVT OFFICIAL 5.38pm BST Oil prices have moved higher again after Opec said demand would be stronger than expected.In its monthly report, the producers said demand this year would be 50,000 barrels a day higher than previously thought, thanks to a lower supply forecast for countries outside the group. 5.10pm BST Greece’s cabinet is meeting for the second time in three days to debate what concessions to make to its creditors in its proposed reforms to free up much needed bailout cash. The €750m paid to the International Monetary Fund eases the pressure but not for long, with the country set to run out of cash within a couple of weeks. 3.52pm BST But in the midst of the Greek crisis, and great uncertainty in the markets, this is a notable fact:Despite #Greece living day-by-day from their dwindling cash reserves...Athens stock exchange still up 20% from its April lows. What crisis? 3.45pm BST Another marker of Greece’s financial woes:*GREEK DEPOSIT OUTFLOWS SAID TO RISE TO ABOUT EU7B IN APRIL..bbg 3.37pm BST Back in the UK, and the country’s economy grew a little more quickly in the three months to April than in the first quarter of the year, according to new estimates.The National Institute of Economic and Social Research said it grew by 0.4% during the period compared to the - preliminary - figure of 0.3% for the three months from January to March. NIESR said:We expect the slight softening of GDP growth experienced in the first quarter of this year to be temporary and forecast the UK economy will expand by 2.5% for the year as a whole. 3.24pm BST Here’s the full Reuters report on the ECB’s move to increase the emergency funding to Greek banks:The European Central Bank raised the cap on emergency liquidity assistance (ELA) that Greek banks can draw from the country’s central bank by €1.1bn, taking the ceiling to €80bn, two banking sources told Reuters on Tuesday.The move comes after eurozone finance ministers on Monday welcomed some progress in slow-moving talks on a cash-for-reform deal between Athens and the IMF, the European Commission and the ECB but said more work was needed to each a deal. 2.52pm BST A day earlier than usual, the European Central Bank has increased the emergency funding available for Greek banks:#ECB raises emergency liquidity cap for Greek banks by 1.1 bln euros to 80 billion eurosECB Haircut On Greek Collateral Left Unchanged - BBG 2.46pm BST Time for a recap.We come here with a very clear mandate to improve Britain’s relationship with the rest of the EU, and to reform the EU so that it creates jobs and increases living standards for all its citizens.I don’t think anyone’s now in any doubt that we will hold that referendum on Britain’s membership of the European Union having conducted these negotiations.Tuesday's Guardian front page: PM hops on the fast-track to EU referendum in 2016 #tomorrowspaperstoday #bbcpapers pic.twitter.com/9yxD1xVr4t“We agreed -- we spoke about this -- that we will both make our contributions to this process.”.“The British desire to do a couple of things less bureaucratically, to limit abuse of the basic freedoms in EU treaties ... these are all points on which one can find a common solution,”So #Greece reportedly paid the IMF with its IMF emergency reserves. Clear indication of how much cash they still have http://t.co/EC5KCs6WJqMNI: #Greece cash reserves dangerously low. Still needs to find more than €1bn order to cover salary and pension payments at end of this mthGlobal Bond rout returns with a vengeance. Bund Future sells-off on high volume. pic.twitter.com/3ZjRD3g2vJ 2.32pm BST The global market selloff has reached New York, where shares are dropping at the start of trading. ALERT: Dow down 100 after the opening bell » http://t.co/s9obum1hPO 2.26pm BST Ahha... as suspected, Europe remains unwilling to reopen its Treaties for the UK. According to The Times, Germany’s willingness to work with Osborne only went so far....Germany rebuffs UK on treaty change - day 1 of @George_Osborne's mission to "renegotiate" EU http://t.co/WhwUQilbV7 2.20pm BST David Cameron’s spokesman has added that the PM will lay out some further details on his reform plans at the next summit at the end of June (via Reuters) 2.11pm BST Apologies if the most recent posts are vanishing and coming back, we’re having some technical problems.... GW 2.10pm BST A flurry of newsflashes from Westminster just landed, showing that Britain is determined to get EU Treaty changes as part of its renegotiation strategy. Related: Donald Tusk: Cameron's call to reopen EU treaties is 'mission impossible' 1.32pm BST Back to Greece, and it appears that Greece’s largest pension fund has taken unorthodox measures to meet next month’s bills.Enikos has the details:The Social Security Foundation (IKA), Greece’s largest pension fund, has decided to take short term loans worth €360 million in order to pay June’s pensions to its members, financial site enikonomia.gr reports.The decision was made Monday by IKA’s governing board.Greece's biggest pension fund borrows €360 mln so it can pay June pensions - http://t.co/6jpS2t2qNL pic.twitter.com/KQ3YyOlDYe 1.23pm BST Radio 4’s World At One programme has been discussing the EU referendum.Mike Wood, who won the marginal seat of Dudley South for the Conservatives, is keen to see what George Osborne can win from Brussels, then hold a referendum.New MP for Dudley South @mikejwood: "Let's get that renegotiation out of the way, then people can judge for themselves" on the #EU #wato 1.17pm BST France’s finance minister has told reporters that Britain must be patient and wait until the Greek debt dramas has been resolved.French finance minister Michel Sapin said there was no discussion with Osborne of “the so-called re-negotiation.” “This will be for tomorrow. After the ‘Greek weeks’ we will have the ‘British weeks,’ even if they are not of the same nature,” he said, referencing Greece’s difficulties in securing much-needed bailout cash. 12.59pm BST Today’s meeting of EU finance ministers has ended, with no signs of further progress over Greece’s bailout crisis or the UK’s push for a new deal.Instead, Ecofin has simply agreed about the need to implement structural reforms to tackle economic imbalances in Europe. Ministers also discussed the looming costs of the ageing populations, which could eat into economic growth in future decades.Main results of today’s #ECOFIN Council http://t.co/ajf7mDTTWJ #investEU #EuropeanSemester #ageing 12.08pm BST #brexit @schaeuble says he discussed eu refugee quotas with Osborne. Clearly wants east europe to do more 11.56am BST #brexit cameron's 'impressive' victory provides a 'chance' for the negotiations - @schaeuble 11.56am BST We also have confirmation that Germany has agreed to work with the UK on EU reform.....#brexit @schaeuble "It wasn't up to Osborne and me to decide reform of EU. But we agreed to take this process forward." 11.52am BST Our Europe editor, Ian Traynor, confirms that Germany’s finance minister remains somewhat unimpressed with Greece:#grexit @schaeuble says atmosphere better with greece, can't say same about the substance 11.48am BST Jānis Reirs, Latvia’s representative at Ecofin, was responding to a question from Bruno Waterfield of The Times.Bruno flagged up Osborne’s concerns that eurozone countries could vote as a block and thus damage the single market. Did he push this?We did not receive any communication from @George_Osborne says @eu2015lv on today's stunningly uneventful Ecofin 11.43am BST Latvia’s finance minister, Jānis Reirs, (corrected), has told reporters that Osborne didn’t raise the UK’s demands officially today:Latvian finance minister (holder of #EU presidency) says @George_Osborne did not raise UK renegotiation at #ECOFIN meeting 11.37am BST 11.34am BST Newsflash: Germany’s Wolfgang Schäuble has just told reporters in Brussels that he agrees with George Osborne - Europe needs reforming. 11.23am BST Ministers are starting to emerge from the Ecofin meeting in Brussels.French finance minister Michel Sapin has revealed that finance ministers congratulated Osborne on the election result , but didn’t discuss his mandate for reform.FR fi minister leaving Brussels session: they had time to congratulate @George_Osborne on election but not to start Britain's renegotiation! 11.14am BST For readers just joining us, here’s Associated Press’s write-up of George Osborne’s tub-thumping comments in Brussels today, with some history of Britain’s often troubled relationship with Europe.“We go into these negotiations aiming to be constructive and engaged but also resolute and firm, and no one should underestimate our determination to succeed for the working people of Britain and indeed for the working people of the European Union.” 10.55am BST I do wish I could have eavesdropped the moment when George Osborne chatted with Austria’s finance minister. 10.42am BST Another Greek development -- prime minister Alexis Tsipras has called a cabinet meeting for 2 PM local time (noon BST).“there is almost no-one who believes that negotiations over a [long-term] deal will end in June. Everyone is saying journalists should be prepared to work right the way through the summer and ensure they are around in June, July, early August.” 10.33am BST Over in Greece the government has released figures showing just how low public finances are running.“The probability of such a Graccident are now around 50 percent, as financial and economic conditions continue to worsen. That brings the probability of muddling along for a long time to below 50 percent, and they are declining,” 10.30am BST So here's the catch on the IMF paying the IMF thing. The reserves need to be replenished within a month = Greece no money, needs a June deal 10.16am BST It has emerged that Greece met yesterday’s €750m debt repayment to the International Monetary Fund with money held at the IMF itself.“We made use of money in our holding account in the fund....“The government also used about 100 million of its cash reserves.” 10.08am BST David Madden, market analyst at IG, blame the Greek crisis for today’s stock market selloff, which is accelerating as I type.European equity markets are sustaining heavy losses as Athens gives with one hand and takes with another.No sooner had Greece got back into traders’ good books after making a repayment to the IMF, a comment from Yanis Varoufakis about the country’s solvency sparked a new selloff. 10.01am BST The sterling rally shows that City traders suspect UK interest rates may rise earlier than thought:GBP jumps as both UK manufacturing and industrial production beats. We also think #BoE inflation report tomorrow could be hawkish #GBP #FX*U.K. 1Q INDUSTRIAL OUTPUT RISES 0.1%, REVISED FROM 0.1% FALL 9.53am BST The pound has jumped on the back of the jump in UK industrial production.Sterling hit its highest level of the year against the US dollar, at $1.5628. Industrial output in the UK up 0.5% on a monthly basis in March, strongest increase since September 2014 (+0.7% y/y) 9.50am BST Some upbeat economic news -- UK industrial production grew at its fastest rate in six months in March.Industrial output rose by 0.5%, according to the Office for National Statistics, mainly due to a pick-up in oil and gas activity. 9.31am BST Back in Brussels, George Osborne has been catching up with fellow finance ministers, as he begin his push to renegotiate Britain’s EU membership. It’s the first time the’ve met up since the General Election. (I wonder how many expected to see him back?) 9.15am BST Spain’s El Mundo newspaper is reporting that the International Monetary Fund is reluctant to fund a third Greek bailout.It says the Fund is disappointed by the lack of progress this year, and also concerned that the new Greek government is unwinding some of the previous austerity measures, by rehiring public workers. 9.10am BST Over in the City, shares are dropping this morning.The blue-chip FTSE 100 is down almost 1%, as markets across Europe are bathed in red.Euro-Area Government Bonds join global selloff as rout deepens; Italian 10Y yield +12bps to 1.89%; French 10Y yield +9bps to 0.99%Bond rout rattles markets. #Germany's Dax starts 1% lower as German 10yr Bund yields jump. pic.twitter.com/tBQ9Nf7sH3Risk of a disorderly or straight non-payment by Greece has helped compress yields (as traders piled into safe haven). The lowering of this event risk is allowing capital to search for quality higher returns.Now get ready for commentary saying rising bund yields show ECB QE is failing. It isn't. QE is policy loosening - if it works, yields rise.Of course the risk is that a lack of liquidity/over-valuation push yields up too high. 8.55am BST German journalist Ines Zoettl of Capital Magazine isn’t impressed with George Osborne’s timing:#Grexit looming, but Osborne wants to talk about Britain in #ECOFIN. Splendid isolationIt's how EU public-free-zone works. Ecofin then FAC then #EUCO soon to know more about @David_Cameron's EU 'renegotiation' than Brit voters 8.45am BST Reuters has now published the Austrian finance minister’s criticism of an in/out referendum on Britain’s EU membership. Hans Joerg Schelling told reporters in Brussels that: “I think politicians have to act decisively. And when politicians believe they have to ask the people, it’s an indication that they themselves are not willing to make the decisions and carry the consequences.”[End] 8.33am BST #Austria fin min #Schelling: #Greece gov has to tell voters that it can't stick to electoral promises #Eurogroup pic.twitter.com/U6Nejpgjkj 8.31am BST Austria’s finance minister, Hans Jörg Schelling, has just given a taste of the opposition Britain may face over EU renegotiations.According to Reuters, Scheling suggested the referendum was a sign of weakness: 8.24am BST You can watch George Osborne’s comments on EU reform here:#ECOFIN Council - Arrival and doorstep #UK #Osborne @George_Osborne http://t.co/6u3roNuDLZ pic.twitter.com/eWz7E6HnbP 8.20am BST George Osborne has just arrived in Brussels for today’s Ecofin meeting, and declared that he’s determined to reform the EU for the benefit of Britain, and the rest of Europe too.We come here with a very clear mandate to improve Britain’s relationship with the rest of the EU, and to reform the EU so that it creates jobs and increases living standards for all its citizens.I don’t think anyone’s now in any doubt that we will hold that referendum on Britain’s membership of the European Union having conducted these negotiations. 8.04am BST Chancellor George Osborne has confirmed that Greece, and Britain’s membership of the European Union, will both be discussed at today’s meeting in Brussels.At ECOFIN this am to discuss Greek crisis & in margins of meeting start in earnest conversation how we reform Britain's relationship with EU 8.02am BST Carolyn McCall, the boss of budget airline easyJet, has warned that Britain would suffer if it left the European Union:. @easyJet CEO Carolyn McCall says EU referendum v impt for British business, want reformed Europe but stay in Europe as a lot of benefits"We believe staying in the EU is very important" - Carolyn McCall, CEO of @easyJet this morning 7.57am BST Jeroen Dijsselbloem, head of the eurogroup of finance ministers, has echoed Yanis Varoufakis’s warning that Greece’s financial position is increasingly precarious.He told Bloomberg that:Liquidity is getting more difficult, obviously, as time goes by… 7.52am BST Finance ministers should be arriving in Brussels any moment, and may speak to the media on their way into the Ecofin.Doorstep #ECOFIN around 8.50 AMIndicative programme for today’s #Ecofin Council meeting http://t.co/NUtqJePtrb #investEU #EuropeanSemester 7.50am BST Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.European finance ministers are gathering at the Justus Lipsius building in Brussels this morning for an Ecofin Council meeting, with the Greek bailout crisis casting a shadow over their work.“The liquidity issue is a terribly urgent issue. It’s common knowledge, let’s not beat around the bush....From the perspective [of timing], we are talking about the next couple of weeks.”#Varoufakis says that the liquidity issue is a terribly urgent issue; says this is no news to anyone. #EurogroupOvernight. NZD remains under pressure. Concern over greece's deteriorating liquidity position. Fixed income markets still under pressure Related: Eurozone pushes Greece for more action, as Athens dodges IMF default - as it happened George Osborne, the chancellor, will meet other European finance ministers at a summit in Brussels on Tuesday. The issue of Britain’s membership of the EU is not on the official agenda, but it is expected to be raised informally.A parliamentary bill to approve the referendum will be included in the Queen’s speech on 27 May. The bill will be formally tabled in the House of Commons shortly afterwards to ensure that the prime minister has the option of holding the referendum next year. Related: David Cameron may bring EU referendum forward to 2016 “Reaching an agreement remains difficult to achieve despite expectations for Greece to commit a number of reforms to unlock aid.” Continue reading...
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