Greece’s bailout drama enters a crucial 48 hours, as the two sides strive for an agreement by Wednesday nightECB provides more emergency funds to GreeceIntroduction: Crucial 48 hours aheadMarket optimism continues 9.06am BST Newnight’s economics editor Duncan Weldon agrees that taxes on consumer spending and company profits, and raising pension contributions will not help the economy return to sustainable growth - as the government had been pledging:Big issue now... What effects the Greek economy more: reduced uncertainty boosting spending or tax hikes reducing it?A lot of mainstream macroeconomists supported Syriza on straight forward Keynesian grounds. This deal ain't very Keynesian. 8.53am BST Francesco Papadia, the former director General for Market Operations at the European Central Bank, warns that the Greek proposal fails on two fronts: it doesn’t make the economy more competitive, and it doesn’t deliver debt relief (yet, anyway....)We are closer to an agreement on #Greece, but what about its quality? All on fiscal correction, nothing on structural and debt alleviation. 8.38am BST Europe’s investors remain upbeat about the prospect of Greek deal this week.Stocks have hit their highest level since the start of June in early trading, adding to yesterday’s strong rally. If recent history is anything to go by, there is likely to be a few more twists and turns before a deal is concluded but this is at least a positive sign.The strong gains in global markets just shows how much investors want a deal to be reached and everyone would much prefer it to be this way, rather than for the uncertainty over a looming default. 8.28am BST Newsflash: The European Central Bank is rumoured to have agreed to provide more emergency liquidity to the Greek banking sector.That means the banks can keep running despite suffering a steady outflow of deposits - another €1.6bn is reported to have been withdrawn on Monday.ECB Said To Raise Emergency Liquidity Cap For Greek Banks- BBG $EURUSDFor the 4th time in the past 6 days. #Greece #ecb #ela #banking https://t.co/McsBjRplR3 8.14am BST The backlash against Greece’s latest proposals is gathering pace this morning.“We have the experience from 2011 when the increase from 13 to 23 percent in food service brought the shutdown of 4,500 enterprises and the loss of 40,000 jobs.” 7.55am BST The prospect of the Greek crisis vanishing off the front pages has also cheered investors in Japan, where the Nikkei index hit its highest level since the year 2000. Related: Japan's Nikkei rises to 15-year high after 'positive' Greek crisis talks 7.48am BST After surging yesterday, European stock markets are tipped to keep rising this morning on renewed optimism of a deal this week.#FTSE100 called +15pts at 6835 as Grelief rally extends. After years of last-minute deals, markets long on optimism, short on time 7.44am BST Having slept on it, EU commissioner Pierre Moscovici is still optimistic that Greece and its creditors are on the verge of a breakthrough.Il faut travailler dans la sérénité. Je suis convaincu que nous trouverons un accord cette semaine. C'est vital @franceinter @EU_CommissionIl ne faut pas d'austérité en #Grèce. La finalité est plus de croissance et d'emplois, avec des réformes structurelles @EU_Commission 7.27am BST Good morning.Today’s proposals are a positive step....they will be assessed in the coming hours. Related: Greek crisis: eurozone leaders hold emergency summit - as it happened We have a huge amount of work to do in the next 48 hours.The full scorecard of measures from the Greek reform/bailout proposals today. VAT reform and pensions raise the most pic.twitter.com/FaWo87dYbeThere does appear to have been some shifting of ground on the Greeks part on pensions and VAT, as well as higher taxes on business, though with unemployment at record levels, increasing the level of taxes on businesses on their profits, as well as their employees does sound rather counterproductive, given that an estimated 8,500 businesses have closed since the beginning of the year already.“My personal view is that these measures cannot be voted, they are extreme and anti-social. I believe that in the end, this package which you have at hand, cannot come to the Greek parliament.” Continue reading...
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