“The negotiations between George Papandreou and Antonis Samarasover Greece’s new unity government resume this morning, with the name of the next prime minister expected to be announced before the end of the day.
We are expecting details of French austerity measures – reports over the weekend suggest €8bn of cuts/tax hikes. The announcement is expected at 11am. The cuts come on top of €12bn of savings announced only three months ago.
The eurozone’s finance ministers are meeting in Brussels later today to agree the technical details of the operation of the ramped-up €440bn EFSF.
The Italian centre-left opposition is preparing a vote of no confidence in prime minister Silvio Berlusconi. The media mogul faces a difficult vote tomorrow on the public finances – we will be following developments today ahead of that vote.
The Eurozone Sentix index, an indication of investor sentiment in the Eurozone, is out at 9:30am GMT.
There are few big US corporate announcements this week. Cisco reports on Wednesday and Disney on Thursday, but we will as ever have an eye on the US markets to see how events in the eurozone are impacting globally.
• Silvio Berlusconi is clinging to power. Italy’s prime minister has vowed to win a vote on the public accounts tomorrow, followed by a confidence vote – but details remain vague
• Fears over Italy drove its borrowing costs to euro-era record highs. The yield on Italian 10-year bonds hit 6.69%
• Talks continue in Greece tonight over the formation of a unity government. Lucas Papademos remains the favourite to become prime minister, but is said to be taking a tough line in negotiations.
• Eurozone finance ministers are meeting tonight to discuss the crisis. Germany is under huge pressure to allow the European Central Bank to play a wider role.
• David Cameron urged Europe to deliver on its promises. “Sort yourself out and then we will help” said the prime minister, as George Soros warned that Europe faces a lost decade.
• France announced more austerity. An extra €7bn of tax rises and spending cuts are meant to keep its deficit reduction plan on track
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