Greece to fall deeper into recession as bailout moves closer - as it happened

Graeme Wearden

from on 2015-07-23 18:13 (#F5XE)

Rolling coverage of the Greek debt crisis, the world economy and the financial markets, after Athens takes another step towards a third bailout

7.13pm BST

No point staying up until 3am with this blog, I think. Let's have a closing summary.

Greece took a step closer to a third bailout early this morning, after MP voted to accept legal and banking sector reforms at a late-night session in Athens.

While there is no breakdown available yet of Eurozone consumer confidence in July, it looks highly probable that the heightened crisis in Greece contributed to reduced perceptions of the economic outlook.

This was certainly true of both Belgium (especially) and the Netherlands, where confidence weakened.

6.57pm BST

Greece's largest opposition party, New Democracy, has decided to keep its current interim leader, Evangelos Meimarakis, in place until next spring.

New Democracy decides Meimarakis will remain as leader until spring 2016, reports @geoterzis. 62 of 76 ND MPs had asked for this #Greece

6.52pm BST

The Kathimerini newspaper reports that eight suspected members of the anarchist group Rouvikonas were detained for questioning on Thursday, after a group of protesters gathered outside the Greek PM's residence.

They released leaflets calling for a debt writedown, and for Greece to leave the EU.

Eight arrested during protest outside PM's office http://t.co/iu5YJTsXYa pic.twitter.com/C5Mj3joxix

6.40pm BST

Greece could make its formal request to the International Monetary Fund for fresh financing on Friday, as part of its third bailout, reports the Ethnos newspaper tonight.

#Greece expected to make official bailout request to the #IMF tomorrow http://t.co/PS986yHRIj /via @ethnosgr

"On the debt relief, there would need to be a specific, concrete commitment."

6.09pm BST

The morning rally in Europe's stock markets fizzled out by the close.

Jasper Lawler of CMC Markets explains:

Early gains in Europe slipped away with the open of US markets which are still plagued by disappointment over Apple's quarterly earnings update.

ARM Holdings is finishing the day at the top of the board after yesterday's rout inspired by those rotten Apple results on Tuesday. Given ARM's diverse customer base the sell-off has been seen to have little merit, so whether the rally has further to run here remains to be seen. Pearson is also up around 2% on the back of news that it has finally sold The Financial Times although there are suggestions that given both the London premises and the 50% stake in The Economist have been retained, this price achieved was more than fair. Once the numbers have been dissected there could be further reaction seen here, too.

Scottish and Southern is lagging both off the back of having gone ex-div and some disappointing sales figures, but it's Aberdeen Asset Management that's at the foot of the index, down 7% after a notable fall in AUM was reported with volatility in emerging markets being seen as the culprit.

4.51pm BST

Pierre Moscovici, European commissioner, still expects the Greek bailout to be agreed in the second half of August:

#Grice dynamique i poursuive pour conclusion ni(C)gociations nouveau programme d'aide 2e quinzaine d'aoit http://t.co/55DF76yqk8 @EU_Commission

4.43pm BST

Over in Athens the gloves appear to be finally off in Syriza.

"The prime minister today received the president of the parliament at her request. Alexis Tsipras listened to the views of Zoe Konstantopoulou carefully. He expressed his concern at the institutional discord caused by her otherwise respected decision to differ from the collective direction the government [has taken] and the parliamentary majority which supports it.

The meeting took place in a climate of sincerity and comradeship."

"rights of our people ... and the cohesion of the left and of Syriza which some would like to see break up."

4.31pm BST

Life is full of surprises. And few members of the Financial Times suspected that they'd end up being sold to Nikkei, Japan's largest media company, for 844m today.

Here's the full story:

Classic. @Pearson CEO puts message to @FT employees on some internal messaging system I have no idea how to use.

OH in the newsroom: 'Does anyone know how to open this thing?'

4.27pm BST

The head of Germany's central bank, Bundesbank chief Jens Weidmann, has signalled his willingness to consider extending Greece's debt repayments.

In remarks that may show a willingness to compromise on the question of Greece's debt burden, Jens Weidmann said: "One proposal of the Bundesbank envisages, for example, an automatic extension of the maturities on all the bonds of a country as soon as it has applied for an ESM (European Stability Mechanism) programme."

"That would drastically reduce the financing needs of a possible programme."

4.20pm BST

The Greece crisis has dented consumer morale in the eurozone.

The European Commission's flash estimate showed the euro zone consumer morale indicator was -7.1 points, a chunky deterioration on the -5.6 in June.

2.04pm BST

German newspaper publisher Axel Springer has now emerged as the front runner to buy the Financial Times, and add it to its stable of titles including the tabloid Bilt.

Axel Springer now favourites to be the company in talks to buy the @ft http://t.co/mLJktZOVPg pic.twitter.com/oVJZvxSBu0

2.01pm BST

Veteran economics writer Anatole Kaletsky has reinforced his reputation for going against the flow, by arguing that Greece's bailout deal will end well.

Kaletsky argues that Europe's leaders will want to show that their tough approach to Athens will work, by showing a little flexibility in its bailout targets.

1.54pm BST

Speaking of central banks, Turkey left interest rates unchanged today:

Turkey's central bank left its repo rate unchanged at 7.5 percent on Thursday, as expected $USDTRY ^MW

1.50pm BST

...and up goes the US dollar, on the back of that surprisingly decent weekly jobs report:

Dollar basket spikes as US initial jobless claims falls to lowest since 1973 at 255,000. 1 min @IGcom chart pic.twitter.com/OFExqDnyDO

1.35pm BST

Over to America, where the number of people filing new claims for unemployment benefit has hit its lowest level since 1973!

Just 255,000 filed initial jobless claims last week, down from 281,000 the previous seven days.

US back to work! 255K weekly jobless claims vs 278K est #usd

Claims look even better when you consider how much the population has grown since 1973

1.15pm BST

The shadow of Greece's financial crisis even reaches the Acropolis today.

A group of contract employees from the Ministry of Culture are protesting at the entrance of the ancient site today, saying they are owed up to six months of unpaid wages:

12.47pm BST

That much-anticipated meeting between prime minister Tsipras and speaker Konstantopoulou has ended....

Speaker Zoe Konstantopoulou meets PM, says priority is to safeguard party unity #Greece pic.twitter.com/pBQXtvKBqC

12.12pm BST

A third bailout deal won't prevent Greece plunging into a deep recession year, a leading Greek thinktank has warned.

The Foundation for Economic & Industrial Research (IOBE) has abandoned its prediction from April that Greek GDP would rise by 1% this year, given the turmoil in the economy since capital controls were imposed.

"The recent turbulence in the banking system and its impact on its capital adequacy along with the wait for the outcome of negotiations for a new programme would be the main cause for a suspension of the overwhelming majority of business investment in the second half of 2015."

11.54am BST

11.26am BST

Over in Athens, talk of divergence in Syriza will be topping discussions between prime minister Alexis Tsipras and House speaker Zoe Konstantopoulou this lunchtime.

Tsipras meets with speaker of parliament Constantopoulou - http://t.co/uUrhdSZJvY pic.twitter.com/d1ZFaHHyzE

11.10am BST

Greece's stock market workers face a longer wait before they can do any actual trading.

The Athens exchange shut down when capital controls were introduced at the end of June, and officials say it won't reopen this week.

Greece to decide next week when Athens stock exchange will reopen. It's been closed for 4 weeks after capital controls imposed. @BBCNews

11.00am BST

Our friends at the Financial Times may be about to change hands.

The wait will soon be over... PEARSON SAID TO IMMINENTLY ANNOUNCE SALE OF FT: REUTERS

I, for one, welcome our new global digital news company overlords. https://t.co/UGK29euu6E

10.51am BST

Over in Athens, parliamentary speaker Zoe Constantopoulou has arrived for talks with prime minister Alexis Tsipras.

PM #Tsipras meets with House Speaker Zoe Constantopoulou at Maximos Mansion #Greece

10.25am BST

The big question at last night's vote was whether Alexis Tsipras would suffer fresh defections, which would have weakened his grip on power.

In the event, he emerged unbowed, with three fewer rebels than a week ago.

Spreadsheet showing all no/abstaining/absent #Syriza MPs in last two parliamentary votes https://t.co/eWNHB7Dadn pic.twitter.com/fhS3Es5tVM

10.15am BST

The Athens News Agency has rounded up some of the headlines in today's papers:

9.58am BST

Today's Spanish jobs data shows that youth unemployment has hit a three and a half-year low, and is finally below 50% again:

Spain's youth unemployment rate dips to 49.2% in Q2, below 50% for the first time since Q4 2011 http://t.co/4KOdeTsteR

9.55am BST

Greece's economic plight is driving more and more of its young people to seek jobs overseas, making it even harder to return to sustainable growth.

Data provided by U.K. jobs site CV-library.co.uk shows that visits to its website from Greek workers last week more than doubled from a year ago and that traffic from Greece has hit an all-time high.

Based on weekly growth rates, CV-library expects the overall number of Greek workers searching its site for U.K.-based employment to double from June to July.

#Greece job seekers flock to UK web sites http://t.co/OUF7faWanD @andretartar pic.twitter.com/G6KZPOC2f9

9.40am BST

Britain's consumers reined in their spending a little last month, according to the latest data from the Office for National Statistics.

Retail sales volumes dropped by 0.2% compared to May, a weaker performance than expected (economists had pencilled in a 0.3% rise).

Falls were reported by predominantly food stores, other stores, household goods stores and petrol stations.

A hiccup for the UK! Compared with May 2015, the quantity bought in the retail industry was estimated to have decreased by 0.2%. #GBP

Oops UK retail sales - June

9.21am BST

Encouraging news from Spain this morning. The unemployment rate has fallen to 22.4% in the second quarter of this year, down from 23.8% in January-March.

That certainly doesn't resolve Spain's jobs crisis (the worst in the eurozone after Greece). But it does suggest that recent growth is finally feeding into the labour market.

First analyst reaction after Spain unemployment rate fell at record pace, to 22.4% in 2Q: "avalanche of new jobs" should put Rajoy at ease

9.16am BST

The flaws in Greece's bailout deal are well-documented -- too many recessionary measures, unrealistic targets, a frankly unconvincing and provocative plan to privatise a50bn of state assets.....

And no guarantee of really effective debt relief at the end, although it will at least be discussed.

Much is missing in the a-area, but not Parliament support: #Greek Parliament 230 yes, 63 no, #Bundestag 439 yes, 119 no 40 abstentions.

9.05am BST

Europe's stock markets are all up this morning, as traders welcome the news that Greece can now begin formal negotiations with creditors over a third bailout.

Here's the situation:

Greece and its creditors now have to utilise the co-operative momentum (slash Greek capitulation) that has fuelled this latest wave of breakthroughs in order to try and create a more long-term solution to this saga.

Whilst this still may prove to be a too tall an order, the relief of the Greek vote success, which was never really in doubt but still provides some much needed breathing room, boosted the DAX and CAC after the bell, with both looking much healthier than they did on Wednesday.

9.02am BST

It could be a busy day for central banks too - with South Africa expected to raise interest rates, and Turkey expected to sit tight, according to informed City types:

SA and Turkish Central Banks today. proper markets with proper decisions (+25 and flat expected)

8.54am BST

An autumn of electoral activity looms, even if Alexis Tsipras holds his coalition together:

Looking to be busy autumn of elections in Europe: Catalonia (27 Sept) & Spain (end of Nov?), Portugal (4 Oct), Poland (25 Oct) & poss Greece

8.49am BST

French bank BNP Paribas has also cautioned against assuming that the Greek crisis is now on the back burner.

Analyst Andrew MacFarlane told clients this morning:

Greece approved the second set of measures demanded by creditors this morning; formal negotiations on a new bailout programme can now begin, although risks remain...including differences between the IMF and European creditors on debt relief as well as concerns over whether the Greek Government will be able to implement the socially unpopular deal.

8.34am BST

Slovakia's finance minister has welcomed the Greek vote, but warned Athens that it actually has to implement these economic reforms:

The Greek parliament vote is another step in the needed direction. We still have a long way to go #eurozone #Greece #ECB #IMF

The tricky part - called implementation - comes now. The Baltics, #Ireland, #Portugal, #Spain and #Slovakia showed it can be done

The introduced hike in the value added tax (VAT) is a painful measure, but means quick and instant budget revenue #Greece #eurozone #reforms

#Greece, like #Slovakia, needs to focus on the effectiveness of the tax collection and the fight against tax fraud, #tax avoidance

8.27am BST

Italy's central bank chief has warned that Greece's debt problems can't be solved simply by extending its existing loans.

Reuters has the story:

Extending Greece's debt repayments would not be enough to resolve the country's problems, European Central Bank Governing Council member Ignazio Visco said in an interview with an Italian newspaper on Thursday.

Visco told daily Il Foglio that the issue of Greek debt needed to be dealt with "even by lengthening further its maturities, but it is clear that this will not be enough to overcome the country's problems.

8.05am BST

At around 4am Athens time, the vote came too late for today's Greek newspapers. So they focus on the splits within the Syriza party.

Divorce, battle, rift: 3 newspapers headline the split within leading SYRIZA after vote #Greece pic.twitter.com/bimDOR6bwE

7.51am BST

European stock markets are expected to rise this morning, following the Greek vote:

Our European opening calls: $FTSE 6700 up 32 $DAX 11568 up 48 $CAC 5102 up 20 $IBEX 11551 up 67 $MIB 23793 up 111

7.48am BST

Good morning, and welcome to our rolling coverage of the Greek debt crisis, and other events across the world economy, the financial markets and business.

There's a touch of relief in the eurozone this morning, after the Athens parliament voted by a wide margin to accept a programme of economic reforms demanded by creditors.

Greek Parliament approves second tranche of measures despite 36 no votes in #Syriza -@yanisvaroufakis surprisingly supports #Tsipras #vouli

Greek parliament approves bailout reform package - as it happened http://t.co/qs5iiGi4Ju pic.twitter.com/64IhO9LCts

The Greek side had been under pressure to strike an agreement quickly so that funds from the new loan could be released to repay a3.2bn due to the European Central Bank on August 20.

But implementing the new agreement could be delayed, to the creditors' dismay, if Alexis Tsipras, the prime minister, decides to call a snap general election.

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