Job heading up merged Ladbrokes-Coral business increases pressure on City regulators to report on Hornby’s role in lender’s demiseAndy Hornby, the former boss of failed bank HBOS, will secure a senior role in the gambling business formed from the merger of Ladbrokes and Gala Coral, putting pressure on City regulators to publish a long-awaited report on his role in the mortgage lender’s implosion.Hornby is to be appointed chief operating officer of the whole group and will pick up a large bonus following the merger, which is expected to be announced on Friday after more than a month of talks. Continue reading...

Officials from EU, ECB and IMF creditors prepare to return to capital for talks on third bailout despite Alexis Tsipras’ personal pledge against itGreece is bracing for the return to Athens of officials representing the reviled “troika” of creditors as the debt-stricken country prepares to start negotiations for a third bailout.Mission chiefs with the EU, European Central Bank and International Monetary Fund fly into the Greek capital on Friday for talks on a proposed €86bn (£60bn) bailout, the third emergency funding programme for Athens since 2010. Continue reading...

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

The deal between Brussels and Athens is actually a good one for both sidesNow that Greek banks have reopened and the government has made scheduled payments to the European Central Bank and the International Monetary Fund, does Greece’s near-death experience mark the end of the eurozone crisis? The conventional answer is a clear no.According to most economists and political commentators, the latest Greek bailout was little more than an analgesic. It will dull the pain for a short period, but the euro’s deep-seated problems will metastasize, with a dismal prognosis for the single currency and perhaps even the European Union as a whole.Related: Greece bailout agreement: key points Continue reading...

In the wake of the financial crisis and with the rapid rise of new technologies, award-winning economist and journalist, Paul Mason, believes we're on the cusp of a seismic economic shift, of a kind yet to be seen in human history. So has capitalism had its day? Watch him argue his case with Douglas Murray, Zoe Williams, Julia Powles and Pat Kane.

Almost nine out of 10 Russians approve of their president, according to survey that also highlights support for Ukraine strategyVladimir Putin’s approval rating is at record levels, with nine out of 10 Russians saying they have a positive view of their president. Putin had an approval of 87% in July, and an all-time high of 89% in June, according to Levada Centre polling.

Falls in sales in June were reported by petrol stations, food stores and shops selling household goodsFalling prices failed to tempt consumers to part with their money last month as shops and online traders reported a surprise drop in business.The Office for National Statistics said the volume of retail sales in June fell 0.2% compared with May, confounding City expectations of a 0.4% post-election boost to spending. Continue reading...

Large majority of MPs including Yanis Varoufakis, the renegade former finance minister, approves further measures required to qualify for €86bn in loansGreece’s prime minister easily won a crucial vote on a third bailout programme for the debt-stricken nation early on Thursday, hours after the European Central Bank infused cash-starved Greek banks with further emergency liquidity.A total of 230 MPs backed the economic reforms programme demanded by Greece’s creditors, while 63 voted against the plan at the late-night vote.Related: Business live: Anti-austerity protest in Athens ahead of bailout voteRelated: Chances of Greek bailout rest on MPs' vote Continue reading...

MPs in Athens have voted to accept a second package of economic measures tonight, despite another Syriza rebellion

The 6,000 claimants say they were not given necessary information about HBOS finances and other details before the ill-fated acquisitionLloyds shareholders involved in a £350m legal battle over the company’s takeover of Halifax Bank of Scotland (HBOS) have gone to the high court in an attempt to obtain secret documents relating to the deal.The 6,000 claimants, who all held Lloyds TSB stock at the time of the acquisition, claim they were kept in the dark when they were asked to approve the takeover.Related: Bank of England and FCA's report on failure of HBOS suffers further delaysRelated: Lloyds v RBS - two banks with different problems Continue reading...

Athens and Berlin are so outraged with each other that they need to calm down before any kind of resolution can become possible. Is counselling the answer?Political Berlin feels emotional right now. A high-level German politician put it this way to me recently: “It’s like a whole hysteria going on here. The Berlin political world is emotional all the time. It has to stop, but I don’t know how. The anger is on the left, it’s on the right.” The historian Jacob Soll touched on this outpouring of emotion as it relates to Greece in a column in the New York Times last week, and his conclusion is that Germans must regain their cool if they want to lead Europe.He is right, but he is skipping a step. Germans cannot regain their cool until they reduce the outrage they feel towards Greece, which they perceive as the guilty partner in their eurozone marriage. To do this, both nations must engage an impartial, outside mediator to help them mitigate the outrage they feel towards each other. In a structured, therapy-like setting, relevant policymakers from both sides would then finally be able to sit together and create a shared vision to wrest Greece from its economic depression.Related: Why is Germany so tough on Greece? Look back 25 years | Dirk LaabsAn impartial mediating team could help treat the emotion and lower the outrage Continue reading...

Bank’s policymakers fear infighting over bailout talks may drag down growth in eurozone, but admit prospect of hike increasing as UK economy strengthensBank of England policymakers are concerned that backsliding in talks to resolve the Greek debt crisis could delay Britain’s first interest rate rise in eight years, but admitted that the prospect of a hike is increasing as the UK economy strengthens.With Brussels and Athens yet to begin formal talks on a third bailout deal, the monetary policy committee (MPC) said the eurozone could falter in the event of renewed infighting between Greece and its creditors. Continue reading...

‘Despite the doom and gloom and fulminations ... business confidence has risen in recent months’An interest rate cut is possible, but evidence of further economic weakness will not automatically trigger one, the governor of the Reserve Bank, Glenn Stevens, warns.A period of somewhat disappointing, but hardly disastrous, economic growth and well-contained inflation has allowed the interest rate to be cut to very low levels, Stevens said at the annual Anika Foundation lunch in Sydney on Wednesday.Related: RBA's warning to the government: we can't lift the economy aloneRelated: Reserve Bank of Australia leaves interest rates unchanged at 2% Continue reading...

Report predicts house price rises of 5% a year and shortage of affordable homes, as cost of deposit locks people out of property marketHouse price rises of 5% a year and a shortage of affordable homes are set to swell the ranks of “generation rent” over the next decade, so that by 2025 more than half of those under 40 will be living in properties owned by private landlords.A report from economists at accountancy firm PwC suggests the number of new homebuyers is set to fall over the next 10 years, as the high cost of raising a deposit locks large segments of society out of the housing market.Related: What George Osborne did for Generation RentRelated: ‘Generation rent’? We’ve been here before | Danny Dorling Continue reading...

Draft report on collapse of bank later rescued by Lloyds TSB during 2008 credit crunch must be reviewed by those criticised in process called ‘re-maxwellisation’The long-awaited report into what went wrong at HBOS before it was rescued by Lloyds TSB during the 2008 banking crisis is facing further delays, it has been revealed as investigators admitted they need the permission of individuals criticised in the report before it can be published.Andrew Bailey, deputy governor of the Bank of England, revealed on Tuesday that the draft report on events that took place at least seven years ago ran to 500 pages. The investigation has received 1,425 representations from more than 35 individuals and their lawyers over the report, which is being compiled by the Bank of England and the Financial Conduct Authority (FCA).Related: HBOS report delayed to end of yearRelated: HBOS: the bank that couldn't say no Continue reading...

Borrowing down by almost £1bn on year before as George Osborne steers course to hit deficit target of £69.5bn for 2015-16Lower spending by local authorities provided George Osborne with a boost last month by cutting the amount the government needed to borrow to balance taxes and spending by almost £1bn to its lowest June total in seven years. Official figures showed public sector net borrowing – the Treasury’s preferred measure of the deficit – stood at £9.4bn in June, down £800m on the same month in 2014.Despite a smaller cut in borrowing last month than the City had been predicting, analysts said Osborne was on course to hit his deficit target of £69.5bn for the entire 2015-16 financial year. The independent Office for Budget Responsibility (OBR) said the June total was £700m above market expectations, with strong tax receipts offset by rising spending by Whitehall. Local government spending was £1bn lower than a year earlier. Continue reading...

Creditors demand a complete change to civil code and to comply with EU banking reform law, with voting seen as a test of Syriza’s strengthGreek MPs will vote on Wednesday on two laws that could make or break the country’s prospects of an international bailout. Greece is poised to begin talks with its international creditors on a proposed €86bn (£60bn) bailout, but first the Greek parliament has to vote through two measures – a banking reform law and an overhaul of Greece’s civil code.Introducing these laws was a demand of Greece’s creditors and remains the final hurdle Athens must clear before embarking on a demanding schedule of bailout talks. Continue reading...

As things quieten down in Greece we turn our attention back to the UK where official figures show an improvement in government borrowing in June

Figure of £9.4bn is the lowest June total for years – as income and corporation tax receipts rose – but is higher than economists’ forecasts of £8.5bnBritish government borrowing last month fell by less than expected but was the lowest June figure for seven years, the latest sign that the pick-up in the economy is helping the public finances.Britain’s headline public borrowing fell to £9.4bn in June from £10.2bn a year earlier, the Office for National Statistics said on Tuesday. However, economists had forecast a figure of £8.5bn.Related: Business live blog: UK government borrowing falls Continue reading...

The Greek PM is facing up to the need for reform, he should look to the example of the Brazilian leader who successfully confronted financial constraintsThe Greek prime minister, Alexis Tsipras, has the chance to become to his country what the South Korean president, Kim Dae-jung, and Brazilian president, Luiz Inácio Lula da Silva, were to theirs: a man of the left who moves toward fiscal responsibility and freer markets. Like Tsipras, both were elected in the midst of an economic crisis. Both immediately confronted the international financial constraints that opposition politicians can afford to ignore.On assuming power, Kim and Lula were able to adjust, politically and mentally, to the new realities that confronted them, launching much-needed reforms. Some reforms were “conservative” (or “neo-liberal”) and might not have been possible under politicians of the right. But others were consistent with their lifetime commitments. South Korea under Kim began to rein in the “chaebols”, the country’s huge family-owned conglomerates. Brazil under Lula implemented “Bolsa Familia”, a system of direct cash payments to households that is credited with lifting millions out of poverty.The only possible silver lining is that Tsipras’s supporters may now be willing to swallow the creditors’ medicine Continue reading...

All over the world, environmental justice movements are challenging

Some on the left claim the eurozone crisis suggests the EU won’t protect workers. History shows the folly of this stanceWith events in Europe of historical resonance unfolding before our eyes, it is more vital than ever to understand developments. But many on the left seem to be drawing precisely the wrong conclusions.There is an argument gaining momentum on the left – given voice by Owen Jones in these pages last week – that the current EU crisis proves that the European project does not work for ordinary people. Many on the left, according to this line of argument, will have “dipped their toes” in the sea of Euroscepticism and found conditions more amenable than they expected. They invite the rest of us to join them: “Come on in,” is their pitch, “the water’s fine.” Continue reading...

Alexis Tsipras’s troubles are far from over with struggle to muster cross-party support for bailout terms and talk of early elections on the horizonThe reopening of banks and repayment of debts returned Greece to a semblance of normality on Monday but the ruling Syriza party admitted it faced considerable political challenges in pushing through reforms.After a drama-filled month that saw the country come close to being ejected from the eurozone, the government, led by the prime minister, Alexis Tsipras, appealed for unity as it faced another make-or-break vote in Athens on Wednesday.Related: Greek banks reopen to a surprise: no deluge of panic-stricken customers Continue reading...

Maurice Obstfeld is an economic advisor to President Obama and University of California academic who voiced doubts in 1999 about the euroAn academic who has warned that the euro was a gamble has been named as chief economist at the International Monetary Fund.Maurice Obstfeld, an economic adviser to Barack Obama, is on leave from the University of California at Berkeley.

‘People have behaved so responsibly, so maturely,’ say staff at historical Athens headquarters of National Bank of Greece on first day after 21-day forced closureAt 6am on Monday morning Dimitris Rombopoulos was at his post as the security guard outside the National Bank of Greece. By 6.30 the first of a small but steady stream of people, mostly white-haired pensioners, had begun to appear.

Greece’s bank branches are open for the first time in three weeks, but capital controls are still in place

Officials confirm that almost all of €7.2bn bridging loan went into repaying money owed to the ECB and IMFGreece has taken a step back to normality after its banks reopened following three weeks of closures and receipt of a €7.2bn (£5bn) loan, with almost all of it spent on repaying debts.Greek officials began paying back international lenders shortly after the emergency bridging loan arrived in the Greek government’s bank account on Monday. Continue reading...

Withdrawal limit relaxed to €420 a week and deposit boxes can be emptied, but capital controls remainGreeks were queueing outside banks on Monday morning, as the institutions opened their doors for the first time in three weeks, amid hopes that the beleaguered nation can reach a swift agreement with its international creditors on a bailout of its wrecked economy.Limits on cash withdrawals remain in place, but have been loosened. Greeks are now able to withdraw up to €420 (£290) a week in one transaction, rather than being limited to €60 a day. But restrictions on sending money abroad and other controls have not been lifted and the Athens stock market is closed until further notice.Related: Now a deal has been done, what lies ahead for the Greek economy? Continue reading...

I have long been a supporter of the EU and thought we should adopt the euro. The extraordinary incompetence of the money folk is changing my mind. Christine Lagarde said she wanted to have discussions with “adults” and “grownups”. How “grown up” are those in the troika who have made such an extraordinary hash of the Greek predicament and, in consequence, of the whole European project? Like Wonga, they extended credit when they shouldn’t have done, and are now extorting money from those to whom they should not have extended it. What kind of a mess is that? What kind of Europe is this? They are deeply incompetent, if not worse. I honour Peter Luff’s commitment (Letters, 17 July), but his allies have let him down.

The eurozone should have learned from Coca-Cola’s mistake - if it aint broken, don’t fix it. And when it’s broken, get out of the fix, as quick as you canThe date 23 April 1985 was a momentous day in the life of the Coca-Cola corporation. For years, the company had been planning a new drink to see off the challenge from Pepsi. There was no expense spared for Project Kansas.“New” Coke (as it was dubbed) bombed. The company responded with alacrity. It didn’t say consumers were wrong. It didn’t say that given time New Coke would be a success. It didn’t plough on simply because it had invested heavily in Project Kansas. Instead, it recognised that there was only one option: to go back to the traditional formula. This returned to the shelves on 11 July 1985, within three months of “New” Coke’s launch.Related: Now a deal has been done, what lies ahead for the Greek economy? Continue reading...

With UK households among the most indebted in any major economy, even a modest interest rate increase would have a huge impactBorrowers beware: Mark Carney’s clear message in his speech at Lincoln cathedral last week was that interest rates may have to rise soon – something anyone who has bought a home or taken out a loan in the past eight years will never have experienced.Yet the other signal that came through – aside from some chin-stroking on medieval inflation and the Magna Carta – was that the fragile, lopsided state of the post-crash British economy means the Bank must proceed with great care. Continue reading...

The Bank of England has hinted at a Base rate rise, but the connection between it and savings rates has been severed for some timeFor the first time in years things are looking up for savers. Or are they?Last Thursday Mark Carney, the governor of the Bank of England, indicated that interest rates would rise as early as December. This should be good news for savers who have witnessed rock bottom returns over a six-year period in which the Bank base rate has stayed at 0.5%. But this might not bring a correlating rise in the rates paid on savings accounts. Continue reading...

Greece’s banks will reopen on Monday and the country will step back from the brink – but can the nation get back to normal or will it be permanently scarred?In the week when Greece’s economic drama peaked, six men conducted a ritual at the site that speaks of everything Europe cherishes most. At sunrise, and then again at sunset, they marched in perfect synchronisation to the top of the Acropolis. There, with rare solemnity, they sang the national hymn, saluted the Greek flag and then marched back down again.The predictability of such a ritual – at the single greatest monument to democracy – contrasted vividly with what was going on below: a make-or-break vote in parliament, an economy in meltdown, closed banks, capital controls, popular uncertainty and protesters hurling petrol bombs at police. “What we now desperately need is to diminish the uncertainty,” says Professor Yannis Caloghirou, who teaches economics at the National Technical University of Athens. “The banking system needs to be stabilised, we need to get back on the road of normalcy.”The age of innocence, the optimism that dominated society after the fall of the junta, is overRelated: Eurozone ready to start formal talks with Greece over €86bn bailoutRelated: Greece debt crisis: reforms will fail, says ex-finance minister Yanis Varoufakis Continue reading...

In Ireland, Portugal and Spain, the IMF has left and at least the semblance of growth has returned. But Greece’s problems put it in a class of its ownThey used to be pejoratively labelled the “Pigs”: Portugal, Ireland, Greece and Spain, the “peripheral” countries carried into the eurozone on a wave of prosperity that were all forced to go cap in hand to their neighbours – and the International Monetary Fund – when the financial crash came.Yet while Greece’s plight has only worsened over the five years since it was first rescued, the other three bailed-out countries have managed to return to growth, and send the inspectors from the International Monetary Fund back to Washington.A lot of the Spanish story is a function of exports. In 2009-10, factories were relocating from eastern Europe to Spain Continue reading...

Varoufakis says conditions imposed on Greece by creditors will ‘go down in history as the greatest disaster of macroeconomic management ever’Economic reforms imposed on Greece by creditors are going to fail, according to the country’s outspoken former finance minister.Yanis Varoufakis told the BBC that Greece was subject to a programme that will “go down in history as the greatest disaster of macroeconomic management ever”.Related: Now a deal has been done, what lies ahead for the Greek economy?Related: Tourists in Greece: 'Don't tell the cook we're German' Continue reading...

The austerity crisis in Greece, the Iran nuclear deal, the San Fermín festival in Pamplona – the best photography in news, culture and sport from around the world this week Continue reading...

Talk of interest rate rise fuels seven-year high against euro but makes life tougher for UK exporters and puts unwelcome focus on household financesBritons holidaying in Europe this summer were handed a windfall by the Bank of England after the prospects of higher interest rates sent the pound to a seven-and-a-half-year high against the single currency.With the euro already weakened by the Greek debt crisis, comments on Thursday by the Bank’s governor, Mark Carney, pointing to dearer borrowing around the New Year pushed sterling to levels last seen in the month following the collapse of Northern Rock in the autumn of 2007.Related: Pound strengthens against euro after Bank signals interest rate riseRelated: How will a strong pound affect my holiday? Continue reading...

Bundestag has given its backing to new aid talks, but 60 members of Angela Merkel’s conservative bloc opposed the plan

Negotiations set to re-open argument over whether the Greek economy can recover while weighed down with debts totalling €320bnThe eurozone is ready to start formal talks with Athens over an €86bn (£60bn) bailout, paving the way for a month of wrangling over the bitterly disputed question of easing Greece’s debt burden.

Relations between Greek and German politicians may be tense amid the economic crisis, but empathy is easy to find on the streets of both countries

Martin Wheatley’s resignation is another victory for the increasingly bullish banks – George Osborne has capitulated againIt’s job done as far as Britain’s banks are concerned. The departure of Martin Wheatley as the head of the City’s watchdog marks a triumph for the forex fiddlers and the Libor manipulators, but a defeat for the rest of us. The clock has been turned back eight years to the bad old days when the last Labour government ensured that what the banks demanded, the banks got.George Osborne was, of course, full of praise for Wheatley as his resignation was announced. The outgoing head of the Financial Conduct Authority was “brilliant”. He was “passionate” about defending the interests of consumers. A bit too passionate, it seems. Continue reading...

The creation of a single European currency was a brave experiment with the future. It will take another brave experiment to rescue it“Great powers have great currencies” goes the aphorism of Robert Mundell, the Nobel prize-winning political economist. Sure enough, one of the easiest guides to power is to check which currency is most widely accepted around the world. When Britannia ruled the waves, pound sterling ruled the foreign exchanges, while the long “American century” has been papered in greenbacks. Millennia before the iron age of Jean-Claude Juncker and Martin Schulz, Athens enjoyed a golden age – and so did the silver drachma.At its birth in 2000, the euro was garlanded with predictions by Mr Mundell and other eminent economists that it would soon challenge the dollar for global dominance. One of Bill Clinton’s top economic advisers, Jeffrey Frankel, went so far as to co-author a forecast that the euro would overtake the dollar as the world’s top currency … by as early as 2015. This is about more than a league table. As home of the dollar, the US enjoys what has been called an “exorbitant privilege”. Washington can borrow, even at times of crisis, far more easily and cheaply than its competitors. A great currency makes it easier to finance the role of a great power. It also confirms that status. If money talks, it is scarcely more eloquent than when Saddam Hussein redenominated Iraq’s oil exports in euros, rather than dollars (“the currency of the enemy”), or Beijing picked London as a hub for trading the renminbi. When Jacques Delors, the former European commission head, claimed at its inception, “The little euro will become big”, no one quibbled. How could it not? Europe was expanding east and Washington’s “unipolar moment” was drawing to a close. The idea of a monetary union without political union was novel, but it fitted contemporary scepticism of the nation state as an “imagined community” – not to mention the belief of technocrats that budgetary rules could trump political norms. Continue reading...

Politicians in the Bundestag vote to start negotiations by 439 votes to 119, with 40 abstentions

Experts say the Republican presidential candidate’s assertions that changes to overtime pay would result in fewer jobs and lower pay show he is misinformedJeb Bush has created a flap with another statement about American workers. In an appearance in Council Bluffs, Iowa, on Tuesday, he said Barack Obama’s proposal to expand overtime pay to millions more managers and white-collar workers would result in “less overtime pay” and “less wages earned”.Numerous economists attacked Bush’s statement, calling him woefully misinformed. And several studies on the rule contradict Bush’s assertion that the overtime rules would “lessen the number of people working”.Related: Fact-checking Jeb Bush: If Americans work more hours, economy will grow Continue reading...

The self-appointed guardian of the EU’s financial rulebook says EU rules forbid a write-off. But there are many ways to get round the legal restrictionsA vote in the Greek parliament means little to Germany’s finance minister, Wolfgang Schäuble. The self-appointed guardian of the EU’s financial rulebook says Athens can vote as many times as it likes in favour of a deal that promises, even in the vaguest terms, to write off some of its colossal debts, but that doesn’t mean the rules allow it.In fact, as Schäuble delights in pointing out, any attempt at striking out Greek debt is, according to his advice, illegal. Yet Schäuble knows Greece’s debts are unsustainable unless some of them are written off – he has said as much on several occasions. So faced with its internal contradictions, he posits that the deal must fail and the poorly led Greeks exit the euro.Optimists argue that a debt write-off can take many forms, getting round Schäuble’s legal restrictions Continue reading...