How the world sees Greece
 AFP | Greece to ask EU payback for 'sacrifices' AFP But according to government sources, the newly-elected conservative premier argues that Greece's latest rescue package, which provides Athens with an ... Greece Taps Economics Professor to Take Over Finance Minister Post Greece Names Stournaras as New Finance Minister Greece names new finance minister |
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• German chancellor has reportedly ruled out eurobonds for 'as long as I live'
• European stock markets open higher, Spanish and Italian yields flat
European stock markets have opened higher:
• The FTSE 100 index in London is up 25 points at 5472, a 0.5% gain
• Germany's Dax and France's CAC have both risen 0.4%
• Spain's Ibex has climbed 0.8%
• Italy's FTSE MiB is up 0.7%
Spanish and Italian ten-year government bond yields are flat at 6.885% and 6.19% respectively.
Ian Traynor, our Europe editor, reports ahead of today's Merkel-Hollande meeting in Paris:
Chancellor Angela Merkel goes to Paris on Wednesday to try to strike a Franco-German deal with President François Hollande amid deep-seated differences at what has been described as Europe's defining moment.
With the two key EU countries split for the first time in 30 months of single currency and sovereign debt crisis, José Manuel Barroso, head of the European Commission laid bare the high stakes in play at an EU summit in Brussels on Thursday as well as the high frictions between Germany and France.
Merkel's first visit to the Élysée Palace under its new occupant has been hastily arranged and comes on the eve of what is being billed as a crucial Brussels summit which, apart from the immediate financial dilemmas, is to wrestle with a radical blueprint aimed at turning the 17 countries of the eurozone into a fully-fledged political federation within a decade.
"We must articulate the vision of where Europe must go, and a concrete path for how to get there," warned Barroso. But he was unsure "whether the urgency of this is fully understood in all the capitals of the EU".
Since his election last month, France's socialist leader has quickly emerged as the most formidable challenger to German formulas for Europe's salvation after two years of Berlin largely dictating the EU response to the crisis.
Merkel is feeling bruised, having just withstood two unusual attempts by fellow leaders to ambush her and get Berlin to hand over its credit cards to write off what they see as other countries' profligacy.
In Mexico last week at the G20 and then in Rome at two bad-tempered summits in recent days, the Americans and the British – in cahoots with the leaders of France, Spain and Italy – sought to press Merkel into bankrolling fiscal stimulus and bank recapitalisation policies that would cut the vulnerable eurozone countries' cost of borrowing.
The pressure on Merkel may have backfired and reinforced German resistance to the ideas. The view in Berlin is that Hollande will have to back down amid the relative weakness of the French economy.
EU president Herman Van Rompuy published the leaked report for a path towards deeper economic and monetary union yesterday. Elisabeth Afseth, fixed income analyst at Investec, says:
The timeframe for achieving this is a decade, which is ambitious given the lack of agreement after well over two years of dealing with the crisis. Van Rompuy (in collaboration with ECB President Mario Draghi, EU Commission President Jose Barroso and the leader of the Eurogroup, Jean-Claude Juncker), sets out broad plans for further integration of fiscal policy as well as banking regulation, maintaining national decision making, but with the overriding control moving to the EU level.It proposes upper limits on national budgets (in line with the fiscal compact) and moving towards joint bond issuance. The plan will be discussed at the European leaders' summit tomorrow and Friday, I expect there might be some general agreement in the direction of need for further integration, but the plan includes a lot of measures that Germany has rejected firmly in the recent past and it is unlikely it will change its tone much.
Good morning and welcome back to our rolling coverage of the eurozone debt crisis and world economy.
Expectations for the EU summit, which starts tomorrow, are getting lower by the day.
Angela Merkel's comments today when she speaks to the German parliament will be closely scrutinised, after she reportedly ruled out the idea of jointly guaranteed eurozone debt for "as long as I live" at a closed meeting with her coalition partners yesterday. Later today the chancellor is due to meet French president François Hollande, her first visit to the Élysée Palace since the Socialist leader was elected.
Gary Jenkins of Swordfish Research said:
If she really did say that then it is difficult to see how this week's summit can be anything other than a disaster and it may well be that the eurozone is heading into the abyss. Meanwhile it was reported that Mario Monti had threatened to resign unless common euro bonds were introduced, although this was denied by a spokesperson for the PM. Interesting that as far as I am aware Ms Merkel's comments have not been denied…
Italian and Spanish borrowing costs surged at auctions yesterday, when the Italian government bought €2bn of bonds from its oldest bank, Monte di Paschi, in an attempt to shore up its capital cushion.
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 TIME | Samaras to Name New Greek Government as Euro Area Ministers Meet Businessweek By Maria Petrakis and Natalie Weeks on June 20, 2012 Greek Prime Minister Antonis Samaras is set to announce the members of his government today after securing agreement from the country's political leaders on a coalition that will seek relief from ... Antonis Samaras: The Aristocrat Who Now Leads Austerity-Ridden Greece Greece has new government, says Pasok party chief Greek coalition takes power, promises to revise bailout |
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 Globe and Mail | Samaras to Name New Greek Government as Euro Area Ministers ... Bloomberg Greek Prime Minister Antonis Samaras is set to announce the members of his government today after securing agreement from the country's political leaders on ... Greek coalition takes power, promises to revise bailout Greek conservative leader Samaras sworn in as prime minister of ... Greek conservative head Samaras sworn in as prime minister amid ... |
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 New York Times | After Greek Vote, Europe Still Has a Host of Problems New York Times FRANKFURT — After Greek elections eased fears that the country's exit from the euro zone was imminent, attention turned Monday to another unruly political arena: Europe itself. A respite from market pressure early Monday proved to be short-lived, ... US stocks meander as European debt crisis festers FOREX-Euro falls as Spanish yields soar Eurozone crisis: Spanish debt fears cut short markets' Greek relief |
 BBC News | Mexico and EU to focus on economic dialogue Fox News (Fixes lead to show summit is 6th) HASH(0x96e4cac) The European Union and the Mexican government agreed at the 6th Mexico-EU Summit over the weekend in Los Cabos, a beach resort in northwestern Mexico, to "launch a new dialogue on macroeconomic affairs ... Europe to take all steps needed to fight crisis-G20 source G20 begins to grapple with crisis Sigh of relief at G20 summit turns to angst |
Europe looked on with wary relief today as Greek conservative leader Antonis Samaras launched coalition talks after coming first in a vote that follow weeks of uncertainty over whether the debt-crippled country could remain in the joint euro currency.
 Boston.com | Greek right gets shot at forming government CNN International Greek President Karolas Papoulias will ask the leader of the center-right New Democracy party Monday to try to hammer out a coalition. Greek pro-bailout parties seek new coalition | Greek election victor to hold coalition talks Greek Election Defuses One Crisis, but More Lurk |
 Globe and Mail | Markets Signal Initial Relief at Greek Election Results New York Times LONDON — Financial markets and political leaders reacted with initial relief Monday to the results of the Greek elections, which eased fears that the country will leave the euro and unleash further turmoil on the beleaguered single currency. Greek election victor to hold coalition talks Greek election boosts markets but worries remain FOREX-Euro hits 1-month high on Greek relief |
Asian markets surged Monday and the euro rose after Greek pro-austerity parties won enough votes to form a government, but optimism it will stay in the eurozone was tempered with warnings the future remains uncertain.
Tokyo stocks jumped 1.89 percent, Hong Kong surged 1.55 percent by the break, Sydney was 1.90 percent higher and Seoul climbed 2.01 percent.
Shanghai added 0.69 percent, Wellington gained 0.10 percent and Taipei was up 1.98 percent.
Greece's two main pro-bailout parties clinched enough votes to form a government in knife-edge elections, as world powers pushed for a new cabinet as soon as possible to ease global fears.
"Today the Greek people expressed their will to stay anchored with the euro," said Antonis Samaras, the leader of the conservative New Democracy party which preliminary official results showed in the lead with 30.04 percent.
"We ask all political forces which share the aim of keeping the country in the euro... to join a government of national unity," he said.