• EU
finance ministers agree €150bn loans for rescue fund
• George Osborne repeats refusal to contribute
• Draghi: unprecedented pressure on bond markets in 2012
• Chancellor
proposes high street bank reforms
• MPs
and Lords seek changes to banking reform
Latest
23.59 That's it from today's live blog. We'll be back tomorrow.
Goodnight.
20.49 IMF statement: We welcome the EU finance ministers' support for a substantial increase in the IMF's resources.
20.17 Shares in Bank of America have dipped below $5 to their lowest since the financial crisis in 2009.
Billionaire Warren Buffett spent $5bn on a stake in the bank in August, when shares were at $8.65. He is reportedly $1.5bn underwater on his stake. The shares have dipped to €4.93, meaning the bank's market cap has fallen below $50bn.
20.01 EU finance ministers fail to agree on raising the ESM €500bn ceiling.
19.55 Here's the EU statement on the IMF rescue fund:
The German share of today's IMF boost is €41.5bn, France at €31.4bn and Italy at €23.5bn.
So Italy could be bailing out Italy?!
19.49 Forbes has put together an interesting article on five misconceptions about the European debt crisis:
1. Countries go broke when yields rise above 7pc
2. Italy is broke
3. Germany can simply walk away from the euro
4. A Greek or Portuguese default means the end of the euro
5. European governments can never pay their debts
Personally, I can think of five things wrong with these...
19.40 Fitch has placed various Brazilian bank securities on negative watch...
So much for the BRICs lifting us out of this mess.
19.38 Atypical_Scot offers a Boris caption (see 18.50):
Here's Europe... on Bygone Alley
19.37 Eurogroup chief Jean-Claude Juncker:
Four non-euro EU states to make IMF loans for eurozone. The EU would welcome
G20 members and other financially strong IMF members to support the efforts
to safeguard global financial stability by contributing to the increase in
IMF resources so as to fill global financing gaps.
19.30 Market reaction to the EU statement: US Treasuries inch higher, 10-year note yields at 1.806pc - the lowest since October 4.
19.22 BREAKING NEWS...
EU statement: Sweden, Denmark, Poland and the Czech Republic will add to the IMF and some countries will need a parliamentary vote. Britain to define its contribution in early 2012.
EU urging other big IMF contributors to aid bailout.
19.20 S&P has downgraded the credit rating of Spain's Valencia region by three notches to BBB-, the lowest investment grade.
Getting closer, Spain.
19.18 Good Boris caption (see 18.50) from peejay:
Age 40, MP
Age 45, Mayor of London
Age 50, Minister for Magic
19.11 ukipguy on the Boris caption competiton (see 18.50):
Boris: If only I could magic away this debt crisis, stupify.
19.09 Paul Donovan from UBS on the IMF fund:
The European finance ministers are looking for loopholes with this lending to
the IMF, to then lend back to eurozone... We need to go back to the drawing
board. Europe needs to end its isolation from the UK. The EU needs the UK.
19.07 Johndeed has come up with this suggestion to our Boris Johnson caption competition (see 18.50):
Boris: This is what the city will look like in 10 years if Barroso gets his way.
18.52 An EU statement on today's meeting of finance ministers is expected shortly.
18.50 And here is London Mayor Boris Johnson taking a stroll along the set of Diagon Alley - used in the Harry Potter films.
Caption competition time (no prize though). Will publish the best ones here.
18.45 Greece has said that aid program nation (i.e Greece, Ireland, Portugal) are not in the IMF funding plan that stems from today's €150bn boost.
18.31 Anne Sinclair, wife of former IMF chief Dominique Strauss-Kahn, has been named French woman of the year by online women's magazine Terrafemina.
She finished ahead of Christine Lagarde, the first female chief of the IMF.
Seems unfair to me.
18.17 We are hearing reports that the EU has agreed to €150bn in bailout loans for the IMF fund - €50bn less than hoped for.
18.13 Further to the IMF fund talks, the UK Treasury has told the Telegraph:
The UK has always been willing to consider further resources for the IMF, but
for its global role and as part of a global agreement.
We were told that George Osborne came under pressure to increase funding for the IMF vehicle but that he stood firm.
18.10 Our Brussels correspondent Bruno Waterfield tweets:
18.05 Confirmation of those reports that Britain has refused to pledge money for an IMF fund to help solve Europe's debt crisis. This from Dutch Finance Minister Jan Kees de Jager, who has just told Dutch TV:
Britain said it wanted to talk about in a G20 context.
17.50 Ambrose Evans-Pritchard has blogged with a bit of context to bear in mind on George Osborne's latest refusal to contribute to the IMF specifically for a eurozone bailout:
Our refusal to pony up a further €31bn we cannot afford to prop up a monetary union that was created against our wishes and better judgment, and with the malevolent purpose of accelerating the great leap forward to a European state that is inherently undemocratic.
It is being presented as treachery, Anglo-Saxon perfidy, and the naked pursuit of national self-interest.
Let me just point out:
1) The UK never agreed to such a commitment in the first place. The line was written into the December 9 summit communiqué in an attempt to bounce Britain into handing over the money.
2) The UK does not consider the rescue machinery to be remotely credible as constructed.
3) The eurozone has the means to tackle its own debt crisis, if it is willing to use them. These include fiscal pooling and the mobilisation of the ECB.
17.40 Press Association reports that George Osborne has used the conference call this afternoon to repeat the Government's position that the UK is prepared to take part in global efforts to increase the IMF's resources, but will not participate in any fund intended specifically for the single currency.
However, Swedish Finance Minister Anders Borg said he believes conditions are in place to reach an agreement in the European Union on providing funds to an International Monetary Fund package.
17.30 Some more reaction to George Osborne's high street banking reform proposals - while the BCC (see 17.18 entry) sounds a note of caution about the impact on businesses, the New Economics Foundation argues that they don't go far enough.
Tony Greenham, head of finance and business at NEF, said:
We welcome the government’s decision not to water down the Vickers Commission
any further, but the ICB’s recommendations do not go far or fast enough to
reform the banking system.
2015 is too long to wait for these reforms and leaves the public exposed in the (increasingly likely) event of another financial crash –we might have to bail banks out again. It also gives banks years to lobby for laws to be watered down even further.
17.25 Draghi: Draft text of the new EU treaty could be made much better.
Sounds like an attack on the new proposals
17.18 Britain has given its formal approval to proposals by the Independent Commission on Banking to ring-fence the country's top retail banks from their riskier investment banking arms.
John Longworth, director general of the British Chambers of Commerce, said:
We cannot afford to see collateral damage among Britain's businesses as a
consequence of banking reform. While there is clearly a need to ensure our
banking system is robust, new regulations, however desirable in principle,
must not inadvertently derail the recovery or hinder businesses' access to
finance.
In Paris, the CAC-40 edged up 0.06pc to 2,974.20 points, while in Frankfurt the DAX 30 fell 0.54pc to 5,670.71 points.
16.52 Draghi: If France loses AAA rating then it is likely other countries' ratings will be changed, too.
16.50 More comments from Draghi, who says...
We want to activate all channels that would enable confidence to return to markets, cost of credit to go down and job creation and growth to take off. You need overall design that is reassuring to citizens of Europe.
For some countries it's not a matter of interest rates fuelling growth. They are blocked by lack of competition, labour markets that dont function, that penalise young people. Young people earn less than they were 10 or 15 years ago. For these countries they must look at structural reform.
We are doing our best to avoid a credit crunch from lack of funding. This is what we are addressing as it is the most pressing one. We need a firewall with adequate means in eurozone to fight temporary instability at sovereign bond market
EFSF stands ready to act. ECB puts infrastructure and know-how at disposal of EFSF.
Raising taxes would lead to medium-term recession. Countries must do all the things needed for growth. Our monetary policy is accomodative.
16.45 Here is the full text of George Osborne's address to the Commons on banking reform.
16.30 Mario Draghi says that bond markets will experience unprecedented pressure in 2012.
16.29 More from If France loses AAA rating then it is likely other countries ratings will be changed, too.. He is asked by an MEP: "Mr Draghi, you do not look like Santa, many people want you to be, handing out money like candies..."
He replies: "The treaty forbids monetary financing. We want to act within treaty. Losing credibility for the central bank is not going to do any good to market confidence or euro design."
16.22 Meanwhile in Brussels some comments from Mario Draghi:
No trade-off between austerity and growth. Austerity creates short-term
contraction. But is this avoidable? We have no choice. What should we do to
offset this? The first response must come from governments. Some are acting
and are on the right track.
Austerity at one country doesn't produce all the right results. We need progress in 'fiscal compact'. Need to have progress in fiscal union, too. If you want confidence to return you need trust to return, between citizens and governments.
16.17 Ed Balls's main gripe in response appears to be that he wasn't given a copy of the report so he hasn't been able to prepare a very good response.
16.15 Some early reaction to the Chancellor's comments, from our banking correspondent Harry Wilson:
And from the BBC's Robert Peston:
16.12 Osborne: RBS has already announced it will further shift its business structure. Government believes RBS's future is as a major UK bank with the majority of its business in the UK in personal, SME banking.
RBS should emerge as a stronger, safer bank.
16.10 Osborne: Implementation of plans should proceed in stages with final changes relating to ringfencing by the beginning of 2019. Primary and secondary legislation to be through by the end of parliament in 2015.
Banks expected to comply as soon as practically possible thereafter.
The government estimates the total cost to UK banks to be between £3.5bn and £8bn pounds
Cost to GDP at £0.8bn to £1.8bn pounds, slightly lower than ICB estimate and far outweighed by benefits.
16.08 The Chancellor lauds the sale of Northern Rock to Virgin Money and says banks will implement measures to make it easier for consumers to switch account, such as transferring direct debits over for free, by September 2013.
16.06 The Chancellor will introduce depositor preference so depositors are the last to have to shoulder losses. Large ring fenced retail banks will be required to hold equity capital of at least 10pc. There will also be a minimum requirement for the loss absorbing capacity of big banks of at least 17pc.
16.03 The Chancellor says the government will separate retail and investment banking through a ringfence. This will not protect banks from failing but it does protect those elements critical to householders.
Deposits and overdrafts of individual and small-and-medium sized business will all be kept separate from riskier wholesale and invement banking. The ringfenced bank will be legally independent with limits on how much it can loan to the other banks.
We will make sure that nothing is too big to fail.
16.02 George Osborne:
While a European and international regulatory response to the crisis is
important, we cannot rely on this response alone to make our banking system
safe.
16.00 George Osborne is up now...
15.55 Some more of Mr Draghi's comments and some instant reaction from economic pundit Zerohedge:
15.50 Mr Draghi says:
• A new fiscal compact is an essential signal for the future evolution of the eurozone.
• Cost, wage and price pressures in the eurozone should remain modest.
• Inflation is likely to stay above 2pc for several months then decline to below 2pc.
15.45 We were expecting George Osborne to speak at 15.30 today but Immigration Minister Damian Green is still answering urgent questions in the Commons about removing foreign criminals.
We'll bring you Osborne's speech when it comes - though we'll be surprised if there are any surprises after days of previews setting out exactly what we expect him to say.
15.40 Mr Draghi says that intensified financial market tensions continue to dampen eurozone economic activity. He says he expects the eurozone economy to recover very gradually in the course of 2012.
Mario Draghi, President of the ECB.
15.30 Mario Draghi is due to be addressing the European Parliament any minute now, though no sign of him yet - apparently officials in Brussels have just gone to find out where he is...
15.20 A take on all things eurozone from across the pond: Canada's Desjardins Group Economic Studies team reflects today that the sovereign debt crisis in the euro zone "worsened until it eclipsed all other large financial, economic and political problems elsewhere in the world."
François Dupuis, Desjardins Group Vice-President and Chief Economist, said:
2012 will still be a difficult year on a global economic and financial
scale, but a glimmer of hope is emerging for 2013.
14.40 Mr Westerwelle's stories - which he used to illustrate the importance of European unity - have gone down well:
14.36 William Hague says the UK will not back down from its requirements, as set out by David Cameron at the EU summit.
And now Mr Westerwelle is telling anecodotes about his childhood visits to Britain...
14.26 Herr Westerwelle is making reassuring noises about Britain's relationship with Europe in the wake of Cameron's 'nein' at the last summit.
He has said that the UK is an "indispensable partner" in the European Union and must build bridges after the EU summit.
He also says that there is "no hidden agenda" against the City of London.
14.20 The German Foreign Minister Guido Westerwelle is speaking at a press conference with William Hague. An unscheduled interruption has got the lobby hacks exercising their wit:
13.50 An action-packed afternoon is coming up, with the Chancellor apparently in two places at once:
According to economist Megan Greene on Twitter, the EU finance ministers' conference call is not due to finish until 17.30, from its 14:30 start time.
We assume this means George Osborne will have to duck out of the call to make his statement about bank reforms to the Commons at 15.30.
Also at 15.30, ECB President Mario Draghi will testify to the European Parliament.
13.35 With the European finance ministers due to have their conference call in an hour's time, reports are surfacing that the talks may end without agreement on the €200bn of loans to the IMF announced at the leaders summit earlier this month.
The Telegraph's Bruno Waterfield and Italian reporter Fabrizio Goria both say talks may end without the eurozone nations agreeing on the €150bn they were due to pay in. Via Twitter:
And if it's turns out to be the case, even more controversially, Dow Jones is reporting that the loans from all EU nations will fall short of full €200bn because Britain will not give its consent immediately to the roughly €30bn the EU is banking on us contributing...
13.30 A report from Open Europe out today finds that European Central Bank exposure to struggling eurozone economies has surged by 50% in six months, meaning, it argues, that the ECB unlikely to act as lender of last resort.
The ECB is unlikely to buy the hundreds of billions worth of government
bonds required for it to properly backstop the eurozone, following an
underwhelming agreement between EU leaders at the summit of 8 and 9
December. However, Open Europe notes that, contrary to popular opinion, the
ECB is already heavily intervening in markets.
Through its government bond buying and liquidity provision to banks, we estimate that the ECB’s exposure to weaker eurozone economies has now reached €705bn, up from €444bn in early summer – an increase of over 50% in only six months, raising fresh questions about its credibility, independence and possible losses it may face in the case of future sovereign defaults.
13.25 Here's a check on the markets as just after 1pm today. Not a great deal happening...
13.20 Ahead of George Osborne's statement this afternoon where he will set out his plans to make banks ringfence their retail arms from their investment banks, here's Nick Clegg talking about another policy likely to be unpopular with bankers:
13.10 Boston Consulting Group have also been making forecasts today and have produced a handy chart to set out the implications of countries leavinf the Euro, both for those leaving and those remaining.
You can view it via the zero hedge site here.
12.40 Philipp Hildebrand, the Chairman of the Swiss National Bank, has been gazing into his crystal ball and he reckons the Euro will still exist in five years.
12.15 As George Osborne gets ready to go in to bat for Britain in talks with the eurozone finance ministers, let us know what you think the British government should be negotiating for:
12.10 Dominique Strauss-Kahn, the former head of the IMF, has been speaking at an economic forum in Beijing - his first professional engagement since he was charged with sexual assault in May. He says that Merkel and Sarkozy 'do not understand each other':
12.00 A midday update on what's coming up this afternoon:
• At 14.30, George Osborne will be dialing in for a 27-way conference call with other European finance ministers, to disuss bilateral loans to the IMF.
• At 15.30, Mr Osborne will stand up in the Commons to make his statement on the government's response to the Independent Commission on Banking, where he is expected to wholeheartedly endorse the recommendations of Sir John Vickers to ringfence high-street banks from their investment arms.
As we reported this morning, a joint committee of MPs and Lords warned his draft proposal “needs significant amendments” to be fit for purpose.
11.40 The incoming Spanish People's Party may have just made itself less popular with the people.
In an interview, just hours before the new Prime Minister Mariano Rajoy makes his first speech to Parliament, Secretary-General Dolores Cospedal suggested her party would be open to tax rises, a softening of the long-held stance that tax hikes would damage economic recovery.
Señora Cospedal said:
We need to see the state of the accounts. Our position is not to raise taxes
because the economy would recover before we needed to do so. But if it turns
out the deficit is higher than expected, the government will have to make a
decision.
Spanish People's Party Secretary-General Dolores Cospedal
11.30 VSA Capital analyst Malcolm Graham-Wood sums up in his blog how things are looking today:
EU leaders are ‘comme d’habitude’ leaving decision making to the last minute with $200bn worth of bilateral loans due to be paid to the IMF by the 19th of December, 'eek, that’s today', they will be saying ahead of another summit of leaders tomorrow.
11.10 Bit of a reverse ferret this morning from the German finance ministry.
Last night the newswires were seizing on comments by Wolfgang Schäuble in a local newspaper interview when he said:
It is clear that the sooner and the more paid-in capital the ESM (European
Stability Mechanism) has, the more it gains trust on the financial markets.
My priority is to create trust.
Wolfgang Schauble, the German Finance Minister
Seemingly "Germany may pay full ESM contribution in 2012" was not the headline he was looking for. This morning a spokesman for the finance ministry, asked about Schauble's comments, said:
It is not very likely we will pay the full contribution (in 2012)
A ferret, possibly reversing
10.55 PwC's economics team has modelled what GDP growth would look like over the next two years in Germany, France, Italy and Spain, under each of four scenarios.
In their first scenario, monetary expansion, all four countries would see varying degrees of growth in 2012 and 2013.
In scenario two, orderly defaults, all four would see their economies shrink over the next two years, Italy's by as much as 4.5pcn in 2012.
In the third, a Greek exit from the euro, Germany and France would see modest growth of 1pc or less in 2013, with Spain flat and Italy shrinking slightly.
And in the final scenario, a new currency bloc, Germany and France would see growth of around 2.5pc in 2013 but Italian GDP would shink by a whopping 5.5pc in 2012 and 3pc in 2013, with Spain faring little better, shrinking 4.5pc in 2012 and 2pc in 2013.
10.40 The Italian President, Giorgio Napolitano, has said that the current firewalls to defend the euro are insufficient.
Speaking at a ceremony in Rome, Napolitano said medium-term measures to toughen fiscal discpline taken by European leaders this month must be accompanied by "the immediate defence of financial stability in the euro zone".
He called for a "strengthening of the still insufficient firewalls necessary to defend sovereign debt and save the single currency".
10.10 Telegraph columnist (and Mayor of London) Boris Johnson has argued this morning that the recent frostiness in Anglo-French relations is "pantomime xenophobia". The Frogs do love us – they’re just hopping mad with Germany, he says, a point he elucidates with the aid of Monty Python and the Holy Grail:
In fact, the whole castle is occupied by French knights, and they treat the English king with disgraceful rudeness.
First, the guard tells Arthur that he has no interest in obtaining a Holy Grail, since they already have one in the castle
When Arthur says he would like to have a look at this marvel, the French knight refuses, and concludes: “I don’t want to talk to you no more, you empty-headed animal food trough whopper. I fart in your general direction. Your mother was a hamster and your father smelt of elderberries.”
The French then cry “fetchez la vache”, and use a trebuchet to bombard the Knights of the Round Table with a dead cow.
09.50 In case you were doing something more festive on Friday night and missed it, there was a flurry of ratings agency activity.
Fitch put six European countries on watch for a possible downgrade and Moody's cut Belgium's credit rating by two notches to Aa3.
Belgium, Spain, Slovenia, Italy, Ireland and Cyprus were all put on rating watch negative by Fitch.
After all last week's feuding between France and Britain over who's credit rating should be cut first, France's AAA rating was affirmed, by Fitch although the outlook was revised to negative.
09.40 The bond markets have let up a bit on Spain and Italy today, but are giving France a hard time:
French 10-year bond yields, or the interest investors charge to hold the debt, rose 10 basis points to 3.13pc, while yields on Spain's debt slipped 7 basis points to 5.15pc and Italian yields fell 5 basis points to 6.86pc.
Clear Currency's Barry O'Neill offers an explanation for the improvement in sentiment:
This week the ECB is expected to start offering longer term three year
liquidity loans (rather than one year) to ease the effects the debt crisis
is having on bank lending.
09.30 The Telegraph's Benedict Brogan says today's main political event is George Osborne delivering the Government reponse to the banking reform report carried out by Sir John Vickers earlier this year (see 07.55 post). He writes:
The Chancellor is likely to endorse, at least if Vince Cable is to be believed. The Business Secretary was on the breakfast shows yesterday, and he said that the proposals will be implemented “in full” - something Lord Oakeshott calls a “triumph”.
09.00 Wolfgang Schäuble, the German finance minister, has said there is "no chance" of the US increasing its contribution to the IMF to help the eurozone.
Political opposition to bailing out Europe while the US economy is in its own mess means markets should rule out any help from that quarter, he said.
The White House said last Friday the Washington-based Fund had "substantial resources" for dealing with the euro crisis and American taxpayers would not contribute any more.
08.40 The Left in Europe has had a "calamitous" six months as the debt crisis has rumbled on, writes Ambrose Evans-Pritchard.
He questions whether they can ever make a come back with enforced commitments to lower spending being enshrined in law by eurozone nations signing up to the new fiscal consolidation rules:
The 26 states that went along with this Merkel plan have given up the right to pursue counter-cyclical Keynesian stimulus, and have agreed to do so in perpetuity since it is almost impossible to repeal EU “Acquis”.
Personally, I am not a Keynesian – nor are many Daily Telegraph readers – but this strikes me as a mad commitment to make. For the Left it is surely an unmitigated disaster. They cannot pursue their economic agenda ever again.
Fabians feared long ago that such an outcome was built into EMU. They called the euro a “bankers’ ramp”, but somehow their warnings were drowned out in the mass hysteria of monetary union.
08.05 London markets are now open, and as expected are trading lower:
07.55 It was always tough to hold the front page with banking regulation, but in the wake of the financial crisis and taxpayer-funded bank bailouts, the subject has far more popular appeal.
Today, the Chancellor is due to publish the Government's response to the Vickers report into banking reform, which included recommendations
If he can get a word in edgeways between the death of Kim Jong-Il and the eurozone crisis, George Osborne is expected to back a separation of retail banking (ie. your high street branch and business loans) and investment banking, now commonly known as "casino banking".
However, my colleague Angela Monaghan reports that a committee of MPs and peers says the draft proposals need "significant amendments" to be fit for purpose. She writes:
The critical report, which is due to be published today suggests the Coalition has missed the point on some of the key issues involved, not least failing to clarify who would be in charge should a problem in the system occur – a confusion which aggravated the last crisis.
Peter Lilley, Conservative MP and chairman of the committee, said the Chancellor and not the Bank of England should “take charge” in any situation which might result in the need for public money.
07.45 Mario Draghi, the president of the European Central Bank, has warned of the costs of a break-up of the single currency, particularly to weaker economies already struggling with deficits, in an interview with the Financial Times (£).
Mr Draghi took over as ECB chief last month and has been fighting fires in the eurozone ever since. His willingness to coutenance a break-up is a departure from his predecessor Jean-Claude Trichet who would only say sich a scenario was absurd, the FT reports.
He told the newspaper: Countries that left and devalued their currency would create “a big inflation” and fail to escape from structural reforms that would still have to be implemented “but in a much weaker position,” Mr Draghi told the Financial Times.
ECB president Mario Draghi.
07.35 Telegraph commentator Jeff Randall says Britain's plans for banking reform and David Cameron's veto of treaty changes are just sideshows to the main event - that the euro turkey is well and truly stuffed. Jeff writes:
Without a new mechanism for very large and permanent fiscal transfers – from the prudent to the profligate – the euro turkey is stuffed.
The sideshow of David Cameron’s veto will soon be upstaged by the single currency's combustion and the immolation of its weaker members’ economies.
07.30 Britain could be on the hook for a £25bn contibution to the eurozone bail-out fund, to be thrashed out at the finance ministers' meeting today (see 07.20 post).
That would make Britain the second-biggest contributor to this latest injection of cash for eurozone members, in this case to be done through loans to the IMF. Tim Ross and Bruno Waterfield report:
An EU official said Britain was still expected to contribute €30.9billion (£25.9billion), leaving the country as the second biggest contributor to the new IMF fund behind Germany and equal with France.
Any suggestion that Britain will pay more towards the bailing out debt-ridden eurozone economies will cause anger among Tory Euro-sceptics, particularly if the eurozone nations do not pay their fair share.
David Cameron with French President Nicolas Sarkozy.
07.25 Looking ahead to the European market opening, shares are expected to fall, according to the futures market:
07.20 European Union finance ministers, all 27 of them, will be meeting in Brussels today to thrash out the details of measures agreed by leaders at the summit earlier this month when David Cameron exercised Britain's veto.
The talks will cover fresh austerity measures, eurozone bail-out mechanisms and a looming deadline to approve $200bn (£167bn) of bilateral loans to the International Monetary Fund.
My colleague Louise Armitstead has the details:
The loans would be used by the IMF to support struggling eurozone countries.
The finance ministers are also tasked with devising a voting system to govern the European Stability Mechanism (ESM) after the Brussels decision to replace unanimity sparked a revolt. The ministers are under pressure to have a deal ready for approval by EU leaders when they convene on Tuesday.
There are fears that a failure to reach an agreement on either the IMF loans or the ESM would rattle markets which already have to digest the mass credit rating downgrade warnings on eurozone sovereigns that were announced on Friday night.
07.10 Taking a look at what the papers say, Europe and bank reforms dominate:
The Telegraph: Markets on alert as EU finance ministers meet
The Times (£): Euro ministers try again as France faces downgrade
The Financial Times (£): Draghi warns on break-up
The Guardian: Mortgage reform could slam door on homebuyers
07.05 Asian markets have fallen overnight after the news that North Korean dictator Kim Jong-Il has died.
Japan's Nikkei was down 1.1pc at 8,308.42, Hong Kong's Hang Seng slid 2.2pc and the Shanghai Composite Index fell 1.6pc to 2,188.39.
Kim Jong il's death was announced earlier today by state television from the North Korean capital, Pyongyang.
It raises the possibility of increased instability on the divided Korean peninsula as the reclusive regime undergoes a leadership succession.
Those worries are most acute in South Korea and Japan, which have often been the targets of North Korea's mercurial military and diplomatic actions.
Dariusz Kowalczyk, strategist at Credit Agricole CIB, said:
We're seeing deeper negative sentiment in some markets. Basically this is
because risk aversion on the geopolitical front has increased given that
there's a transition of power in a relatively unstable country.
07.00 Good morning and welcome back to live coverage of the global debt crisis.
