Rolling coverage of the ongoing Greek debt talks, as Athens announces it will apply for a loan extension on ThursdayLatest: ECB raises Greek emergency liquidity cap Jack Lew tells Varoufakis to find constructive pathSummary: Greek loan application expected ThursdayEU commissioner: Greece can’t ditch bailout pledgesHere are Greece’s eurogroup proposals 8.23pm GMT OK, that’s all for tonight. A very quick recap of this afternoon’s developments.The US government has increased the pressure on Athens tonight, by warning finance minister Yanis Varoufakis that he needs to reach a ‘constructive deal’ soon.Has anyone other than Varoufakis - who has to sound upbeat to avoid causing panic - said anything positive today about latest Greek offer?SYRIZA managed to elect as president somebody who embodies much of what his wrong w/ #Greece's politics. Truly auspicious for the future 8.07pm GMT Reuters is now reporting that the ECB’s liquidity increase might give Greek banks a week’s grace, assuming savers don’t withdraw funds at a faster rate: 7.54pm GMT Our Athens correspondent, Helena Smith, points out that Prokopis Pavlopoulos is a controversial choice as Greece’s new president.#Greece has got its most controversial president in recent history: and that title goes to Prokopis Pavlopoulos tonightPavlopoulos was also in government during the record growth of Greece’s public finances with profligate practices that included rampant public sector hiring.The white-haired Pavlopoulos was among the worst offenders hiring almost everyone there was to hire in his local constituency in central Greece.@graemewearden @LorcanRK Sure, you see Mr Pavlopoulos is the patron saint of the Greek clientele system. Hired 850K people in 5 yrs for 11bn 7.30pm GMT More reaction.....@graemewearden that's pittance if €500M is flowing out over span of a few daysECB's decision practically means that if no agreement reached with the Eurozone until Tuesday, capital controls in #Greece are imminent. 7.27pm GMT Back to the ECB’s decision to give more emergency liquidity to Greece’s banks tonight.Reuters is reporting that the Greek central bank actually asked for the cap to be raised by €10bn, but only got €3.3bn. That does suggest it wanted significant protection against deposit outflows.No vote taken on ELA increase for Greek banks but Jens Weidmann Bundesbank prez thought to have objected - source familiar with #ECB talks 7.21pm GMT There’s not much “wiggle room” for a deal with Greece, according to Germany’s finance minister: 7.13pm GMT Α €3.5bn increase in #Greece's ELA is just peanuts. The Greek banking system will suffer dire concequences if no deal reached until Tuesday. 7.10pm GMT Hang on....make that a reported €3.3bn increase in Greek bank liquidity -- today’s rise to €68.3bn would be on top of the surprise €5bn rise last week (from €60bn to €65bn). So, not as big a move as thought, but better than a poke in the eye with a draft eurogroup statement.AFP: European Central Bank has extended and increased the emergency funding to Greek banks #Greece 6.58pm GMT Greece’s finance minister has declared that he’s confident that eurozone finance ministers will approve his request for a loan extension on Friday, via a teleconference.Reuters has the details: 6.57pm GMT Correction.... just seeing reports that the ECB has also voted to give Greek banks more emergency liquidity.A helpful move under the circumstances, which might calm fears over the health of the Greek banking sector in the coming days. 6.53pm GMT Brace yourselves for a flurry of news flashes.First up: Dow Jones are reporting that the ECB has agreed to extend liquidity to the Greek banking sector for another two weeks. BREAKING: ECB approves 2 week extension of emergency liquidity for Greek banks, DowJones reports, citing source » http://t.co/5pymyTWddh 6.45pm GMT Looking like a landslide for Tspiras' man in Greek presidential election pic.twitter.com/5gpq1mOCFU 6.39pm GMT It’s official. Alexis Tsipras has succeeded where his predecessor Antonis Samaras failed, and persuaded MPs in the Greek parliament to elect a new president.#Greece Habemus President, Prokopis PavlopoulosProkopis Pavlopoulos reaches 3/5 majority votes to become #Greece's new Preseident. 6.36pm GMT There are two candidates in tonight’s presidential vote. Greece’s To Potami party weren’t happy with the government’s candidate, so proposed Nicos Alivizatos, a Professor of Constitutional Law, instead.He’s not got a chance, though -- Prokopis Pavlopoulos can rely on the votes of the opposition New Democracy party (in which he served as a minister), as well as the Syriza-led governmentCurrent Greek presidential candidate votes: #pavlopoulos 169 #alivizatos 25, 27 abstaining #greece #president #greekpresidentialvote 6.33pm GMT Greek Prime Minister Alexis Tsipras and finance minister Yanis Varoufakis spoke during the first round of the presidential vote.... 6.10pm GMT Giovanna Pancheri, Europe correspondent at Sky Tg24, has heard the ECB probably won’t released a statement tonight (which fits with what Bruno was told earlier)#Ecb sources: a Press release on today board is "most unlikely". #ela 5.52pm GMT Nearly time for that vote in Athens....entering parliament, 20 mins late, lafazanis says there won't be leaks from syriza side in parliament's presidential ballot 5.31pm GMT This is a little worrying.... Reuters is reporting that the European Central Bank is split tonight on whether to give Greek banks access to additional liquidity.Germany is not keen to offer extra help to the banks, who have suffered from deposit outflows since the crisis escalated, it says:Bundesbank chief Jens Weidmann, who has warned against the misuse of the emergency funding to indirectly finance the Greek state, opposed any increase in the cap, the sources said.But while some governors share his reservations, others want more leniency.If the #ECB is equally divided we don't have a problem yet but if it's 67/33... Athens we have problem. 5.20pm GMT Greece’s finance minister has just confirmed that Jack Lew did indeed warn him that Greece will suffer without a deal (and also confirmed that he ‘gets’ Twitter like few other politicians):US Treasury Sec did indeed tell me that nonagreement would damage Greece. He added that it would also damage Europe. Advice to both sides! 5.16pm GMT Heads up: the Greek parliament is convening to vote on whether to appoint Prokopis Pavlopoulos, a former interior minister, as President.#Greece parliament convenes to [finally] elect country's new President. Pavlopoulos vs Alivizatos. Livestream ► http://t.co/yqwSoNmFzg #PtD 5.04pm GMT Sounds like the eurogroup of finance ministers could be meeting again on Friday (assuming Greece submits its proposal in time)EZ working group meeting of officials still scheduled for tomorrow. Based on how that goes, a Eurogroup meeting will be held Friday - source 4.58pm GMT Europe’s stock markets closed higher tonight, apart from the FTSE 100 which finished flat.There is optimism that permission will be granted by Greece’s EU creditors to extend its loan program beyond February and keep the country from defaulting and falling out of the Eurozone.The EU appears generally agreeable to a six-month extension of Greece’s loan agreement. The major sticking point is whether over that 6 months Greece will be beholden to the same bailout terms as the current agreement. 4.45pm GMT Greek bonds have strengthened through the day, too, although prices are still show a high danger of default.It’s 10-year debt is trading around a yield of 10.4% currently, down from 10.6% on Tuesday evening. 4.28pm GMT Back in Athens, the main share index closed 1% higher as traders clung onto hopes that a deal will be reached. 4.03pm GMT Treasury Sec. Lew spoke with Greek finance minister this morning, urged Greek PM to find constructive path forward with EU & IMF - Reuters 3.56pm GMT The United States has waded into the deadlock gripping the eurozone, by giving Greece a clear nudge to find a “constructive” path towards a deal with its creditors, quickly.....noted that failure to reach an agreement would lead to immediate hardship in Greece, that the uncertainty is not good for Europe, and that time is of the essence.”The U.S. is pushing Greece to work it out: @USTreasury Secretary Lew warns @yanisvaroufakis of "immediate hardship in Greece" without a dealJack Lew called @yanisvaroufakis this AM to gently lean on him in the way @USTreasury does so well. Basic message: behave, and hurry up! 3.43pm GMT Greece could be dragged back into recession by the uncertainty over its bailout programme, rating agency Fitch has just warned.The damage to investor, consumer, and depositor confidence is increasing downside risks to growth and Greece’s incipient economic recovery. It may take time to repair even if agreement with official creditors is reached in the coming days or weeks. This echoes 2012, when around 30% of deposit outflows from Greek banks in May and June were not recovered in the second half of the year, even as fears that Greece would leave the eurozone receded. The private sector also experienced a long period of limited or costly access to market financing. 3.35pm GMT My colleague Alberto Nardelli has crunched the numbers, to work out when Greece’s coffers might actually run dry without a new bailout deal. It’s a tricky question. By one measure, Greece might have to start tapping emergency reserves on 24th February, to tide it into mid-March before it faces repayments to the IMF, and then other creditors.If, and it’s a big if, the ECB were to ever pull the plug on Greek banks, the country’s financial system would collapse, and Greece itself would de facto lose its last line of credit.It is hard to see how the house of cards would not then come tumbling down. Simply put, Mario Draghi, the ECB president, holds a sword over Greece’s head.When will Greece run out of money? It's complicated http://t.co/n80ByOid7C 3.19pm GMT Open Europe, the think tank, has helpfully broken down the differences between Greece’s position and the eurogroup.Diffs btwn #Greece & #Eurogroup go beyond words. We lay out, in each policy, what they are & chance for agreement http://t.co/uHW3LreN5r 3.10pm GMT Bruno Waterfield of the Telegraph reckons we won’t hear anything from the ECB about Greek liquidity until late tonight, if at all....I hear from Brussels sources that ECB statement on Greece & ELA is highly unlikely today. If it comes it'll be late evening... 2.59pm GMT The early optimism in the financial markets is evaporating, after Greece revealed it will not submit its request for a loan extension until Thursday.Wall Street has opened lower, the FTSE 100 is now down 15 points, or 0.2%, and the Athens stock market is up just 0.8% (having jumped 2.7% at the open) 2.09pm GMT A quick recap:We believe the terms of the bailout cannot continue by any means.”Asked 3x, @VDombrovskis makes it pretty clear: no loan available to #Greece w/out it meeting conditions of current bailout programme 1.23pm GMT Greece’s minister of state Alekos Flamboraris, a close aide of prime minister Alexis Tsipras, has stirred the waters this morning saying Greece may request an emergency EU summit is held because the Greek crisis is as much political as economic, Helena Smith reports. Speaking to the local radio channel Parapolitika, the minister said in the event that an extraordinary eurogroup wasn’t called by the end of the week, Athens would request that EU leaders convene for an extraordinary summit “as the issue is political.” “Athens is not requesting an extension of the memorandum as the vote of the Greek people has abolished the memorandum.....“Our country is asking that the extension of the loan agreement be agreed so that we can resolve a few things that are still outstanding.” 1.14pm GMT French finance minister Michel Sapin hopes that a Greece deal will be hammered out by the end of the week:AFP reports that Sapin told a cabinet meeting that: “Talks have not yet been successful. France’s objective is for a deal to be reached with Greece by the end of the week.” 12.49pm GMT It’s official: Greece’s application is going to land in Brussels inboxes tomorrow morning, not today as the government said early this morning:Greek govt spokesman Gabriel Sakkelarides tells @SkyNews the official request for loan extension will be sent to Eurogroup on Thurs morning.Little bird tells me delay of submission of bailout xtension request til Thurs involves crucial finetuning both in wording &essence. #Greece 12.47pm GMT In Athens the battle lines are being drawn.The ultra-left anti-capitalist Antarsia party has fired off an excoriating statement following the new government’s decision to request an extension of its loan agreement last night. “We have a Greek government that in reality accepts the overwhelming debt and the immediate obligations that derive from this, commits itself to [pulling off] a primary surplus (that is to say austerity) has asked for an extension of the current loan agreement and declared that it accepts 70 % of the memorandum.” “The European Union’s blackmailing is not the exception but the rule. There is no democratic EU, nor is there an EU of the people.” One the culture clash between Greek Finance Minister Yanis Varoufakis and his eurozone peers: http://t.co/Vuvc1YFl9k pic.twitter.com/7itzVYibNN 12.29pm GMT The head of Greek opposition party To Potami (The River) has said Athens will file its application for a loan extension on Thursday, not today as expected.Stavros Theodorakis was speaking to reporters after a meeting with Greek prime minister Tsipras, where he learned that the proposal will include some costed economic reforms.Potami leader Theodorakis says PM Tsipras told him Greek proposal for loan extension will included reforms & their fiscal impact #GreecePotami leader Theodorakis says has been briefed by PM Tsipras on #Greece's loan extension request; to be sent Thurs pic.twitter.com/OBtl4Lwt5x 12.23pm GMT Rumours are swirling that eurozone technical officials are going to hold talks tomorrow at a Working Group.They would lay the groundwork for a full eurogroup on Friday to discuss Greece’s bailout.BREAKING: officials from eurozone fin ministries to meet in Bxl tomorrow (eurogroup working group), eurogroup expected Friday - srce #Greece 12.16pm GMT Crystal clear. @VDombrovskis says Greece well aware that way forward is to extend the existing programme with conditions 12.14pm GMT Valdis Dombrovskis, European Commission vice-president for the Euro, is discussing the Greek situation in Brussels now.There’s a livefeed here..@VDombrovskis "Under the Greek program there are funds available, if Greece wants to tap those funds it has to complete the program".@VDombrovskis: if #Greece wants funds of existing programme, Athens has to close succesfully review (i.e: pension reform, labour market..) 12.01pm GMT Good news for UK holidaymakers (and eurozone exporters); sterling has hit a seven-year high against the euro this morning. One euro is now worth 73.67p, down from 74.3p last night, following today’s strong UK unemployment report.EUR/GBP HITS 0.7366, LOWEST SINCE 2008; BREACHES 200-MONTH MA 11.43am GMT Insiders in Athens say much of the focus now will be on the wording of whatever document is drawn up to keep debt-stricken Greece afloat, our correspondent Helena Smith says. Former minister for international economic relations, Constantine Papadopoulos, says although the new government is now focusing on the loan agreement it is fully aware that it will have to keep “to the general spirit” of the conditions on which rescue funds have been given Greece. “What we are hearing is that the government is making a tremendous effort to reach an agreement in order to ensure there is no abrupt break in our relations with our euro zone partners. It will request a sixth-month extension of the loan agreement which underpins the memorandum of understanding..... ....“but will do so avoiding the term memorandum of understanding which it cannot be seen to be adopting.” “They will focus on the conditions Greece must meet to have the funds released. They cannot be identical to what we had before but Athens also understands they cannot digress too much from the general spirit of [previous] conditions. 11.36am GMT Back in Berlin, German economy ministry has also warned that Greece’s loan agreement cannot be separated from its reform commitments.In other words, no money without austerity. The battle lines are being drawn, even before Athens submits its request. 11.34am GMT European commission chief Jean-Claude Juncker has told Germany magazine WirtschaftsWoche that he’s helping to craft a deal.In an interview published this morning, Juncker says:“I am working together with Eurogroup President Jeroen Dijsselbloem to achieve an extension of the existing programme, in order to bridge the time until summer.” 11.24am GMT Germany’s government has welcomed the news that Athens is applying for a loan extension today:* German economy minister gabriel says welcomes signal from Greek government that it is ready to negotiate - RTRS 11.20am GMT Dan Davies, senior research advisor at Frontline Analysts, is tweeting as he reads though the Greek negotiation papers released a few minutes ago.He reckons the documents suggests that there could have, and should have, been more progress:Bottom line - there is lots of common ground here between YV and €group. If it was just his statements we'd have a dealThe question in my mind is - why don't we have a deal, and why is the stuff coming out of Athens so incoherent and combative?yes, YV's remarks to the feb 16 €group weren't bad, but the accompanying technical paper was just ghastly; no specifics, lots of bull.p16, YV has suddenly discovered the foreclosure rules as a red line - this must surely have been driven by Athens & internal politicsp21 the stuff on privatisations is desperately unconvincing. the "avoiding fire sales" stuff will have gone down very badlyp15 - EUR70bn for writeoffs of tax arrears wtff???... lots of €group finmins are going to be kinda horrified that there was 28% of GDP in outstanding tax nonpayment fines in the first place 11.01am GMT This lack of detail from Greece must have made it harder for the eurogroup to assess the concessions which Varoufakis was promising. But I’m not sure it’s a reason to have ditched the Moscovici compromise altogether. 10.57am GMT The immediate impression from these documents is that Yanis Varoufakis talks a pretty good game at the eurogroup, but Greece’s proposals are rather short of actual numbers.@dsquareddigest they brought an MSWord doc to an Excel fight.. 10.47am GMT Classy move from the Greek government. It has published the proposals which Yanis Varoufakis took to the two eurogroup meetings of finance ministers, on 11 and 16 February.It is online here in English (via the invaluable Yannis Koutsomitis), and here in Greek (on Capital.Gr).Greek FinMin has published file with Varoufakis's proposals to the Eurogroup #Greece 10.04am GMT Greece’s government spokesman Gabriel Sakellaridis has confirmed that Athens will formally ask for an extension to its loan agreement today, but not the austerity measures which it has vowed to reverse. Sakellaridis told Greece’s Antenna TV that:“We believe the terms of the bailout cannot continue by any means.” “Let’s wait today for the request for an extension of the loan contract to be submitted by Finance Minister Varoufakis.”“All along deliberations are going on to find common ground. We want to believe that we are on a good path. We are coming to the table to find a solution.” 9.51am GMT In other UK economic news, the Bank of England has revealed that one policymaker believes the BoE it is as likely to loosen monetary policy as tighten it. The minutes of the BOE’s last meeting also show that all policymakers voted 9-0 to leave interest rates unchanged at 0.5% this month.Minutes of the MPC Meeting held on 4 & 5 February http://t.co/KQ3cCIIJqS 9.49am GMT UK avg earnings +2.1% 3mth yy above f'casts but ex-bonus +1.7%, below @ReutersPolls median. Still a long way to go pic.twitter.com/0tLGkBLyUk 9.47am GMT Today’s UK unemployment report looks pretty decent. The number of people out of work fell by 97,000 in the October-December quarter, lowering the jobless rate to a new six-year low of 5.7%. 9.33am GMT Just in: Britain’s unemployment rate has fallen to 5.7%, a new six year low.And average earnings, excluding bonuses, rose by 1.7%, year-on-year, in the last three months of 2014. Including bonuses, they were up by 2.1%. 9.29am GMT Analysts at French bank BNP Paribas warns that the next few days will be lively: “The tone between Greece and other European partners (is) less harsh but an agreement is still far from being reached. We still expect an agreement will be reached before the end of February, but we also see room for volatility until that time.” 9.27am GMT It’s business as usual outside the Athens parliament today: 9.22am GMT Greek government bonds are continuing their recovery – the yield on its three-year debt has dropped to 17.6%, from 18.8% last night. 8.49am GMT Newsflashes from Athens: Greece’s government has just confirmed that it will submit a request to extend its existing loan today. #Greece government spokesman confirms Athens will submit request for loan extension today 8.42am GMT In other news... Swiss prosecutors have just said they’re probing a local subsidiary of HSBC for suspected money laundering, according to AP:BREAKING: Swiss prosecutors say they're probing local HSBC subsidiary for suspected money laundering 8.40am GMT Greek government bonds are recovering this morning. The yield (effectively the interest rate) on its 10-year debt has fallen from 10.6% to 10.4%, meaning it is seen as slightly safer. The Greek three-year bond is also rallying a little.Greek ASE +0.4% and Greek 3 year bonds are down 90bps following source comments Greece could request a 6m extension to its loan program 8.36am GMT The Greek stock market is also enjoying a relief rally, with the ATG index up 2.7% in early trading.Optimism abounds, even though a) Athens hasn’t submitted an application yet, and b) eurozone finance ministers may not accept a loan extension if it’s not tied to bailout targets. 8.32am GMT Other European markets are also rising in early trading, with Germany’s DAX gaining 0.5% and the French CAC up 0.7%. 8.29am GMT In London, the FTSE 100 index has hit its highest levels in 15 years, and is closing in on its record peak.The blue-chip index has gained 20 points to 6920, not far from the 6930-point level it closed at back in December 1999. The positive open comes as talks between Greece and the Eurogroup continue this week with PM Tsipras indicating yesterday that, while he remains absolutely committed to forging an agreement with the creditors, the two parties remain far from striking a deal. Nonetheless, it is reported that the Syriza government may request a 6-month extension of its bailout today and that will no doubt calm the waters slightly. 8.18am GMT Eurozone ministers have another incentive to get a deal done quickly – it will spare them from any more lectures from George Osborne.“There was a minister this morning, a non-euro-zone member, who asked if we had thought about what would happen if Greece left the euro,” French Finance Minister Michel Sapin told reporters. “Frankly, it’s indecent.”...Jeroen Dijsselbloem, the Dutch finance minister who presided over Monday’s negotiations, also told Osborne at Tuesday’s gathering that there was no alternative to Greece staying in the euro area, one of the people said. 8.09am GMT Europe shares open higher; Greece negotiations still in focus. http://t.co/FMK3gG0k3w $FTSE $DAX pic.twitter.com/MJNFbrkfmh 8.04am GMT European stock markets are inching higher at the start of trading:Stoxx Europe 600 index opens 0.3% higher at 378.32 8.01am GMT One crucial point: Any Greek deal would need to be approved by other eurozone governments.And Germany is very likely to oppose a mere loan agreement, rather than a formal extension of the current bailout + conditions. 1/3 By publicly slaying Dijssel-draft, #Greece prepared internally the ground for a deal on the Moscovici one. But a huge snag remains: ...2/3 "Greece is *also* insisting that the bailout extension would be in the form of a “loan agreement” rather than the current programme”(FT)3/3 ..."German officials say there is no legal means for making such a loan”. http://t.co/QoXsLuEWZc 7.53am GMT Hopes that Greece might make a breakthrough with its creditors today drove Japan’s stock index to its highest level since the financial crisis struck.The Nikkei gained 1.2%, or 212 points, to close at 18,199.17. That’s the highest point since July 2007. 7.43am GMT Good morning.“We are not going to ask for an extension of the programme or memorandum. The Greek government won’t accept ultimatums.”Greece would not roll back economic reforms; it would continue to run a primary budget surplus; it would pledge to pay its creditors in full. In exchange, Athens would be given leeway in deciding which reforms it would agree to.ECB President Mario Draghi is unlikely to want to go down in history as the man who pulled the plug on Greece and undermine the “irreversible” nature of the euro. Continue reading...
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