Markets fall as poor economic data on Portugal sends Spanish 10-year bond yields to 6pc, while Greece's new PM says staying in the eurozone 'is our only choice'.
Latest23.56 That's it from our live blog for tonight. Log on tomorrow for the latest on the debt crisis, or take a look at our financial crisis page for more analysis.
21.32 While we're on the subject of the PM, Angela Merkel's office has released a statement announcing that David Cameron will meet with the German chancellor in Berlin on Friday to discuss the European economy.
21.27 Back to David Cameron's speech, which has now ended...
The gist was that the UK should stay in the EU, but also forge strong links with emerging markets; Brazil, Russia, India and China, among others.
This could mean doing trade with countries that have questionable human rights policies - something that Cameron said the UK shouldn't shy away from.
Leaving the EU is not in our national interest. Outside, we would end up like Norway, subject to every rule for the single market made in Brussels but unable to shape those rules.
And believe me: if we weren't in there helping write the rules they would be written without us - the biggest supporter of open markets and free trade - and we wouldn't like the outcome.
In dealing with other countries, their politics matter. But when the politics are troubling the answer isn't to deal with the politics and put the trade on hold.
We must be bold enough to try and deal with the politics and the trade at the same time. We should always be a champion of human rights - and we should address our differences candidly. But we should not allow them to define and limit the whole relationship.
21.13 While the PM was talking the US markets closed for the day. Italy and Greece were still weighing on investors' minds.
The Dow Jones shed 0.61pc, the S&P 500 was off 0.94pc and the Nasdaq dropped 0.81pc.
21.08 He points out that 50pc of our exports go to Europe and that leaving the EU is "not in our national interests". But it was time for change, he says.
"We should look sceptically at grand plans and utopian visions. We have a right to ask what the EU should and shouldn't do," adding that the crisis was a chance to "re-fashion the EU".
21.05 Here's a picture of David Cameron at the banquet tonight, with the Lord Mayor of London, David Wootton.
21.02 After describing what Europe shouldn't be, he's put forward what sort of Europe he does want:
One with the flexibility of a network, not the rigidity of a bloc, whose institutions help by connecting and strengthening its members to thrive in a vibrant world, rather than holding them back.
20.58 David Cameron is speaking now at the Lord Mayor's Banquet. He says Britain must remain part of the EU to protect its economic interests but that once the crisis is over, Europe must not turn into a rigid bloc with the power to hurt those on the periphery.
20.10 Jeremy Warner has written a blog post warning that proposals to temporarily suspend credit ratings (see 15.38) when they could cause financial instability are an attack on free speech.
It's not easy to be kind about credit rating agencies... but even an industry as inept as this one doesn't deserve the lorry load of manure about to be dumped on it by the European Commission's Michel Barnier.
The ratings directive, expected to be published on Tuesday, is not so much an assault on the agencies and the way their ratings are used, which most people would regard as fully justified, as an attack on free speech.
19.54 More from Lucas Papademos here, giving his first address to parliament as Greece's new Prime Minister. He needs to secure the next round of bail-out cash before December 15, when his country runs out of funds.
I take office during the most difficult moment in the country's recent history... The country can be saved - it's up to us. I think it is obvious for those who support this government to undertake the commitment and ensure that our country's euro membership is not endangered.
Our first priority is to immediately fulfill the preconditions for the disbursement of the (next) installment... This disbursement must be done by December 15 at the latest, given our funding needs. Our eurozone partners have made it clear: The choice is between staying in or getting out of the eurozone.
19.23 Mario Monti has said that he hopes his government would last until 2013 - when elections are due. A deadline would "reduce credibility" he said.
I would not accept a time limit. It's obvious that parliament can decide at any time that a government does not have its confidence.
19.13 And Greece won't be the only one making hard decisions, according to AP. Italian PM nominee Mario Monti is quoted as saying that the country may be forced to make "sacrifices". We'll bring you more on that as we have it.
19.02 Greece's PM, Lucas Papademos, spoke to parliament for the first time since taking up his new role this evening.
His message was clear: Greece needs to stay in the eurozone, and has to pass painful austerity measures to do so.
The main task of this government as agreed by political leaders under the president is to carry out the decisions of the summit, and to apply economic policies linked to these decisions.
He claimed that estimates put the deficit at "around nine percent" of GDP in 2011, down from 15.7pc in 2009 and 10.6pc in 2010, but warned that public debt was increasing.
The new government of cooperation and me personally, we undertake the responsibility at this critical moment because the country's participation of the eurozone is at stake.
Our EU peers and the organisations suporting us have said that additional funding will only continue if the EU summit decisions are applied in full. Staying in the euro is the only choice.
18.39 From one PM to another, this time France's; Francois Fillon insisted today that his country will meets its EU pledges on debt.
There are a planned €65 billion euros in cuts and tax rises before 2015 to protect its AAA credit rating.
18.28 Papademos says that remaining in the eurozone "is our only choice".
18.26 The main task of the new government will be to implement EU agreements on a debt rescue package, says Papademos. He added that the country's place in the eurozone was at stake.
The main task of this government as agreed by political leaders under the president is to carry out the decisions of the (October EU) summit, and to apply economic policies linked to these decisions.
18.14 The new Greek Prime Minister, Lucas Papademos, is giving a speech in parliament at the moment:
To continue efforts to restore the economy we need support from our European partners... and a new fiscal adjustment programme.
18.01 Our blogger, and South East England's MEP, Daniel Hannan, has described Italy and Greece as satrapies of Brussels, just as much as Bosnia and Kosovo.
What we have witnessed is a coup d’état: bloodless and genteel, but a coup d’état none the less. In Athens and in Rome, elected prime ministers have been toppled in favour of Eurocrats – respectively a former Vice-President of the European Central Bank and a former European Commissioner.
Both countries now have what are called ‘national governments’, though they have been put together for the sole purpose of implementing policies that would be rejected in a general election.
17.37 Bloomberg is reporting that Credit Suisse's Aa1 credit rating is under review. We'll bring you more on that as we have it.
17.35 We reported on Friday that Slovenian bond yields had hit 7pc. This morning they edged even higher, to 7.1pc.
But outgoing PM Borut Pahor has said that the country had already borrowed enough to fund its 2012 budget, back when rates were more reasonable. Which is lucky.
17.25 Sorry to keep on about the same point, but this graph shows the 10-year bond yields for troubled Greece and Italy, with France lagging behind, but unnerving investors by ticking upwards.
17.15 We mentioned that European and US markets have taken fright at the Spanish bond yield hitting 6pc. This is concerning because it's getting near to the slippery-slope level that saw Greece fall into deep trouble. For a bit more background take a look at Matthew Holehouse's latest piece here: Contagion fears rise as Spanish bond yields breach 6pc.
17.04 While we're on the topic of markets sliding, here's a quick update on Wall Street. The Italian bond auction has forced shares down, as well as the fright of Spanish bond yields briefly hitting 6pc.
The Dow Jones is off 0.56pc, the S&P 500 has lost 0.88pc and the Nasdaq slipped0 0.61pc.
16.51 European markets have now closed for the day. Record high yields at an Italian bond auction, even as the country put the finishing touches to its new government, sparked fresh fears over its future.
The FTSE 100 ended 0.47pc off, the DAX lost 1.19pc, the CAC slipped 1.28pc and the FTSE MIB lost 1.99pc.
Angus Campbell, head of sales at Capital Spreads, said:
Equity markets commenced the week on the back foot as investors remained sceptical that the eurozone debt crisis could actually be resolved despite changes at the top of the political elite in Italy and Greece.
The sombre mood was caused primarily by uncertainty that a new Italian administration would find itself with enough support in order to push through badly needed reforms and until any detail is forthcoming as to exactly what will be done in order to reign in their debt, gains for equities will remain hard to come by.
16.33 The dollar is up against the euro as last week's optimism that European governments were getting to grips with their debts fades. The euro fell one cent to $1.36.
16.27 A Twitter spat broke out this morning over Robert Peston's use of the term 'Queer Street' - meaning someone in financial difficulties.
16.01 Hungary has reaffirmed that it won't be seeking cash from the IMF - saying it can "stand on its own feet".
The country's credit rating is looking dangerously close to hitting junk status. But Peter Szijjarto, spokesman for the PM, said Hungary did not want IMF help because of the strings attached - painful austerity measures.
"There is no need. We are financing ourselves from the financial markets," he said.
15.38 Countries that are being bailed-out could have their credit ratings suspended temporarily, said markets commissioner Michel Barnier, speaking on French radio.
He said that the ratings agencies "won't have the right, if the ESMA decides, to rate certain countries for a certain time that are receiving an international support programme from the IMF or European Union."
15.17 The ECB says it lowered its bond purchases last week to €4.5 billion, from €9.5 billion a week earlier.
The bank has been buying-up bonds to keep the cost of borrowing down for Italy and other eurozone members.
It's bought a total of €187 billion in bonds since the program started last year.
14.38 The US markets have opened:
Dow Jones Industrial Average is flat, the S&P 500 dropped 0.4pc and the Nasdaq is down 0.2pc.
14.36 The European Central Bank said it bought fewer bonds last week as Italy’s borrowing costs reached record levels.
The Frankfurt-based ECB said it settled €4.48bn of bond purchases in the week through November 11, down from €9.5bn the previous week
14.34 Greek opposition leader Antonis Samaras said backing for the country’s new interim government should last no more than the three months needed to secure international financing before elections are held.
He added that elections should be held on February 19 and his party’s support for Prime Minister Lucas Papademos didn’t mean sharing power with the ruling socialist Pasok party. He said:
“Elections are a safety valve to avoid a social explosion. We want this interim government to succeed in its mission and will help it succeed, but how long it stands will depend also on us. And when we say temporary, we mean temporary.”
14.22 We are hearing reports that in a letter to the European Commission, Italy has said it will cut 300,000 public jobs by 2014. Senate Speaker Renato Schifani said he’s “confident” Italy will have a new government sworn in by the end of the week.
Remember that Italy has to curb a huge budget deficit and has appointed new prime minister Mario Monti to do it.
14.19 BlackRock is calling for private creditor writedowns of 75pc to 80pc on Greek, Portuguese and Irish debt...
Good luck with that BlackRock!
Also says ECB must contine bond-buying asItaly is too big to fail.
14.16 Quick update on the markets:
FTSE 100: -0.4pc
Dow expected to open down 0.1pc.
14.11 Italian and Spanish bond yields:
(Hover over graph for more information)
14.03 German Chancellor Angela Merkel says Europe faces its toughest hour since the war:
"Europe is in one of its toughest, perhaps the toughest hour, since the Second World War. If the euro fails then Europe fails, and we want to prevent and we will prevent this, this is what we are working for, because it is such a huge historical project."
13.46 BREAKING NEWS...
Italian bank UniCredit to launch €7.5bn rights offer and will not pay a dividend in 2011. Third-quarter net loss €10.64bn, analysts expected €7.4m profit. UniCredit planning 5,200 job cuts through to 2015.
13.27 As the rest of the world is going down, India has asked Moody's for a ratings upgrade.
13.25 Economist Nouriel Roubini is back:
"I think that in the next 12 months, there is a high likelihood that plan A for Italy is not going to work."
13.21 BREAKING NEWS...
Germany-Spain bond yield spread widens to record.
13.19 Pimco co-founder Bill Gross likes UK, Canadian, US, German, French and Spanish debt. Also believes Italy remains in trouble.
Don't worry Bill, so does everyone else.
13.16 Spain's Treasury said on Monday it will issue from €2.5bn to €3.5bn in 12 and 18-month T-bills at auction on Tuesday. It will aim to sell €3bn to €4bn of a new 10-year bond on Thursday
12.59 French bank SocGen: "Spain is now joining Italy on the radar screen".
12.48 Contagion fears are emerging once again. Spanish 10-year bond yields hit 6pc for the first time since August 5. Italian bond yields now at 6.6pc, rising today. UK's down to 2.2pc.
12.45 An interesting stat: only Zimbabwe, Eritrea and Haiti did worse than Italy's average 0.3pc per annum growth rate over the past decade.
12.39 Further to today's bond issuance in Italy (see 10.15). The country still needs to raise €46bn more before the year-end.
And another country in a spot of bother is Hungary. Its bond auction earlier today failed and the forint came close to record lows as investors braced for a downgrade of the country's credit rating.
The state wanted to raise 50bn forints (£136m) from six-week treasury bills but received bids only for 35.7bn forints, none of which was accepted, according to national debt agency AKK.
12.26 Well, while everyone is cutting spending, US investor Warren Buffett is splashing out. He's just revealed he has spent $10.78bn on 5.5pc of IBM. He said he has also been buying bank Wells Fargo "month after month".
12.22 Italy's CONSOB (National Commission for Listed Companies and the Stock Exchange) has said there is a need for ban on short selling on bonds.
12.12 The BBC's Robert Peston has blogged. The gist of is that on Friday, UK 10-year gilt yields were around 2.3pc - compared with 6.5pc for Italy and 5.9pc for Spain. Yet European Commission figures show the UK's deficit will be 9.4pc in 2011, 7.8pc in 2012 and 5.8pc in 2013. The debt ratios are 89pc for the UK, 121pc for Italy and 74pc for Spain. Yet Britain's debt is a third cheaper."
Peston offers four explanations: That Britain's political system is more adept at making tough decisions. That the Bank of England, through £275bn of quantitative easing, is a big buyer of debt. Sterling adjusts to the competitive strength or weakness of the economy, whereas Spain and Italy are unable to devalue because they are locked into the euro. The "impressive" Debt Management Office, whose prudence sees Britain having to borrow £53bn to repay maturing debts next year - compared to 307bn Euros for Italy. That's because the average maturity of Britain's debt is 14 years - whereas Eurozone nations are laden with short-term loans.
12.03 Midday and time for an update on the latest news in the markets and beyond:
FTSE 100: -0.5pc
Latest news: Italian five-year bonds have been sold at an EU-record high; Portugal is still mired in recession, according to the latest figures; industrial production in the EU contracts; US President Barack Obama has told China to "start acting like a grown-up economy" over the yuan; and the Japanese economy has grown for the first time in four quarters.
11.56 More breaking news on Greece and Italy, the focus of so much of the EU debt concerns lately.
A small troika team is “likely” to visit Athens “very soon” to discuss matters with the Greek government and main political parties, European Commission spokesman Amadeu Altafaj has said.
And European Union Economic and Monetary Commissioner Olli Rehn will discuss the mission to Italy at the next meeting of euro-area finance ministers, his spokesman Amadeu Altafaj told reporters today.
11.42 Greek conservative party leader Antonis Samaras is refusing to sign a letter required by the European Union to release a sixth tranche of an EU-led bailout. He added that the 50pc haircut on debts became inevitable because other policies have failed.
What will this do to eurozone confidence and the markets? The slightest quote seems to shatter the mood lately.
11.40 Economist Nouriel Roubini is always on hand to offer his views:
ECB + bailouts: 1) "they don't want to take a huge amount of credit risk" & 2) the treaty's clear: there's no bailout clause. Cannot rule out that the contagion spreads to France [whose] banks are very sharply exposed [to Italy & Spain].
11.32 Signs of slowdown in leading economies around the world are gathering speed, the OECD has warned. The composite index of leading indicators, a strong guide to coming economic performance, "continue pointing to a slowdown in economic activity in most OECD countries and in major non-member countries". the OECD said in its monthly report for September.
From the index reading the previous month, the leading indicators "point more strongly to slowdowns in all major economies", it said.
11.29 Even the Czech president is now saying that the eurozone debt crisis is looking bleak. Vaclav Klaus, a euro sceptic and former economic forecaster, warned:
I'm afraid Europe... is facing a 'lost decade' similar to the one in Japan in the 1990s. A decade without economic growth, a decade of permanent cuts and austerity packages, a decade of social unrest. It is a crisis of European society as such, of its behaviour, its way of thinking.
11.25 Warren Buffett believes we are seeing a "partial run on Europe", and says that he hasn't got back into European sovereign debt but looks at it every day.
He says that housing remains in a depression, and everything from construction companies to carpet companies are feeling the pain.
11.15 Financial experts have been commenting on the Italian bond sale:
David Schnautz, strategist, Commerzbank, London
"Given the tiny amounts, the bare minimum Italy is selling these days to get the upper end of that tiny range is encouraging. [Yields] are still clearly eye-watering ... This can only be done for quite a limited time-span."
Annalisa Piazza, rate strategist, Newedge, London
"Dealers remain cautious on the developments in Italy. The new appointed PM [Mario Monti] is perceived to be a positive change for the country ... Cautiousness on the future developments in Italy is fully justified. Credibility has been lost and it will take a while for market participants to believe that the country is back on the right track."
Marc Ostwald, strategist, Monument Securities, London
"There was always going to be good domestic support particularly with it being a five-year maturity. There is a lot of natural demand from the banking sector for balance sheet purposes."
11.07 German Chancellor Angela Merkel is never short of a word to say on the eurozone:
I believe this is important for those who buy government bonds: that we make it clear that we want more Europe step by step, that is that the European Union, and the euro area in particular, grows together. Otherwise people won’t believe that we can really get a handle on the problems.
11.05 The Telegraph's Sebastian Payne on the mixed Project Merlin figures (see 09.45):
(Roll-over graph for more information)
"The project Merlin scheme was heralded by the Treasury as a key driver of growth and responsibility - the big four banks helping out new enterprises. However, the project is stalling: out of the £76bn Merlin pledged to new small and medium-sized enterprises this year, only £56.8bn has been lent so far. This leaves a £32.3bn gap for the banks to meet their target before the end of the year."
10.51 Asian economies may expand at a slower pace than earlier forecast as Europe struggles to resolve its debt crisis, according to Asian Development Bank Managing Director General Rajat Nag.
“There are significant worries on the horizon for Asia due to the European crisis,” Nag told reporters in Mumbai. “There certainly will be a knock-on effect. Asia will be affected. How much will depend on how soon the eurozone crisis is solved.”
10.31 Chuka Umunna MP, Labour's Shadow Business Secretary, has blasted the Conservatives' handling of the UK economy:
The Government is out of touch with British business and is making the wrong choices for the economy in the short term as well as the wrong choices in the long term for Britain’s future. It is failing to use the tools at its disposal to reward the best of British business practice and has instead rigged the system against firms investing in the long term.
10.24 Markets are beginning to slide following the disappointing bond auction in Italy and EU industrial production figures:
FTSE 100: -0.1pc
10.15 Italy have got away their five-year bond auction. But the country has sold €3bn at an average yield of 6.29pc, an EU-era record high.
10.11 Portugal is still mired in recession. The country's economy contracted by 0.4pc in the last quarter and 1.7pc year-on-year.
Portugal's economy has spent the whole of 2011 in negative territory.
10.04 Never rains but it pours - eurozone industrial production figures are out. They fell to 2.2pc from 5.3pc year-on-year against a prediction of 3.5pc.
It's worse month-on-month - industrial production contracted to -2pc from 1.2pc.
09.54 Ever wondered just how bad Italy's economy is?
(For a larger version of these graphs, click the right-hand-side of the main picture at the top of this blog)
09.45 More bad news, I'm afraid - the amount banks are lending to small and medium-sized businesses (SMEs) under Project Merlin has fallen to £18.8bn in the third quarter of 2011 from £20.5bn in the second quarter. Overall lending grew to £57.4bn from £53bn.
The banks stated they would lend £190bn of new credit to business in 2011, with £76bn of this lending capacity allocated to small and medium-sized enterprises. So far they have lent £56.1 to SMEs and £157.7bn overall.
09.28 Uh oh.
UBS analysts say they expect the eurozone to double dip into a recession in the first half of 2012.
09.27 Quick update on the markets:
FTSE 100: +0.3pc
09.20 Steffen Kampeter, German deputy finance minister, has said that fiscal consolidation in Europe will last years. He has also vowed to reactivate financial markets stability legislation in the country to help its banks.
09.16 A quick view of the bond markets. As you can see, the yield (the last column) on UK 10-year is a healthy 2.266pc. A lot different to Italy's much riskier 6.314pc.
09.03 The EFSF - the EU bailout fund - has said that it did not buy its own debt in the €3bn bond auction for Ireland.
08.59 The traditional two-hour lunches that are commonplace among workers in debt-stricken Spain (its banks' ECB borrowings rose to €76bn in October from €69.3bn in September) could soon be a thing of the past.
The country's CEPYME's labour relations department, which represents more than 90pc of Spain's businesses, says canning the long split shift is worth considering.
We want to avoid excessive work days that contribute nothing to productivity. We see this as an issue to study, an area where there is room for improvement.
More Sangria, anyone?
08.51 Italian 10-year bond yields hit 7.48pc last week, a level most economists agree is unsustainable and could lead to a bail-out and collapse of the EU. But one person believes it is not "such a big issue".
Bundesbank chief Jens Weidmann said:
"Of course this level may not be sustainable in the long run if there is a lack of fiscal discipline and economic growth remains low. But in the short run I do not think it is such a big an issue.
"What we are facing in Italy is an acute confidence crisis, and only the Italian government can resolve that crisis by implementing what has been announced. Italy is very different from Greece in a lot of respects. I'm confident that Italy will be able to deliver."
08.45 Meanwhile, Ambrose Evans-Pritchard believes that "Mario Monti needs a miracle":
"For all the joy in Rome, Italy is just as polarised as Britain was when Margaret Thatcher took over a ruined political economy in 1979. The unions are just as militant. It will take all his [Monti's] charm to hold Italy's ship together through the coming storm, if not a miracle."
08.37 In his daily email, the Telegraph's deputy editor Benedict Brogan asks whether "Super Mario" can save Italy.
"Mario Monti has quite a task to convince the markets that Italy is capable of reform and will repay its debts; the survival of the eurozone [and all our livelihoods] are in his unelected technocratic hands."
08.36 As well as Andrew Gowers (see 07.56), Financial Secretary to the Treasury Mark Hoban also made an appearance on Radio 4's Today programme. He said:
The crisis in the Eurozone casts a long shadow over our economy. The eurozone is our biggest trading partner. That uncertainty has a significant impact at home.
He added that further spending to stimulate growth would appear in the Autumn Statement, hinting at infrastructure spending on roads and energy. The cut in corporation tax means "we are going to have the most competitive tax system in the G7 by the end of this parliament", he said.
The best thing we can do for consumers is make sure they have money in their pocket at the end of the month... The last thing they need is to see interest rates to rise and see money flowing out their bank accounts. It gives predictability about their mortgage.
08.17 Ahead of that Italian five-year bond auction in just under three hours, the yield on the country's 10-year bonds has eased back to 6.362pc.
Last week they rose as high as 7.48pc, a level largely seen by economists as unsustainable.
08.06 The FTSE 100 has opened up 0.5pc, Italy's MIB up 1.6pc. Germany's DAX opens up 0.7pc.
08.04 Canada's finance minister Jim Flaherty believes Europe should use its own resources to resolve its debt crisis before other countries contribute.
Generally, I think the view is that we first need to see that very substantial commitment and action by the Europeans - and I'm talking about the members of the eurozone - before any more would be asked of non-European G20 countries.
08.00 A very interesting article from Ian Cowie, the Telegraph's head of personal finance: Gold demand doubles amid economic gloom and frozen interest rates
Gold bugs like nothing better than doom and gloom about the economy in general and fiat currency in particular. But recent sharp setbacks in the gold price should remind enthusiasts that gold is not a one-way bet.
07.56 Back to Italy now, and new prime minister Mario Monti will reportedly name his cabinet within 48 hours. We'll have the latest as it happens.
Andrew Gowers, the former editor of the Financial Times, told BBC Radio 4's Today programme that Monti's job is "not mission impossible" - even though the techonocrat faces a "snake pit" as he prepares to take on special interests rife in Italy.
07.50 Meanwhile, the Chartered Institute of Personnel and Development (CIPD) has said that unemployment in Britain is likely to rise further between October and December as job losses, particularly in the public sector, look set to outpace hiring.
UK unemployment rose by 114,000 between June and August to 2.57m, a 17-year high. The latest figures are due out on Wednesday. Gerwyn Davies, public policy adviser at the CIPD, said:
Many firms appear to be locked in 'wait and see' mode, with some companies scaling back on all employment decisions against a backdrop of increasing uncertainty as a result of the eurozone crisis and wider global economic turmoil.
07.30 Let's bring you up to speed with the latest corporate news:
Majestic Wine has seen profits rise by 20pc in the first half
ITV external revenue rises 4pc to £1.5bn in first nine months
BG Group has raised the potential of oil at its Carioca site off the coast of Brazil
Sage Group has said it will "defend itself vigorously" after Archer filed a A$130m lawsuit following the collapse of a deal
07.12 ECB Governing Council member Athanasios Orphanides believes plans for a 50pc writedown of Greek debt is damaging to the entire eurozone.
07.03 It's a key week for Italy and Greece. Italy is rushing to form a government around new prime minister Mario Monti (pictured below) following the resignation of Silvio Berlusconi on Saturday. Berlusconi stepped down over the country's dire economic situation.
Meanwhile, Greece's new leader Lucas Papademos is already under pressure from the IMF and European heads to implement radical reform at staving off bankruptcy. He will face a confidence vote on Wednesday before meeting eurozone finance ministers in Brussels on Thursday, where he will be expected to outline next year's draft budget before putting it to parliament.
06.53 Italy is holding another bond auction today. This time it's five-year, due at 11am GMT. Remember, it sold £5bn-worth of 10-year bonds on Thursday paying a rather high interest rate of about 6pc.
06.43 The other big story is that Japan's economy has grown for the first time in four quarters. The world's third largest economy slumped into negative growth following a devastating earthquake and tsunami on March 11.
Japan expanded by 6pc in the July to September period, driven by exports.
06.38 The big news this morning is US President Barack Obama telling China to "act like a grown-up economy". Obama blasted the country for its devaluation of the yuan, which harms US companies by making China's products cheaper. The President said:
China needs to understand that their role is different now than it might have been 20 years ago or 30 years ago when if they were breaking some rules it didn't really matter, it didn't have a significant impact.