http://www.telegraph.co.uk/finance/debt-crisis-live/9114691/Debt-crisis-and-EU-summit-live.html
Angela Merkel will agree to an increase in the eurozone's bailout fund - but not at today's euro summit.
Banks may become addicted to easy central bank financing and delay the adjustment indefinitely. This can be prevented only if supervisors put sufficient pressure on bank managers and shareholders to continue adjustment, and to use central bank funds only as a temporary, exceptional source of financing. However, supervision in the eurozone is implemented at national level, with little incentive to pursue these objectives rigorously and on a level playing field.
There is a dark side to the Draghi magic. Spanish banks used the first LTRO to boost holdings of sovereign debt by 29pc to €230bn, with a similar pattern in Italy. The weakest banks are buying the weakest government bonds, often in volumes that exceed their equity base.
10.12 More bad news for the eurozone this morning. Euro-area unemployment in January rose to an all-time high of 10.7pc, compared with 10.6pc in December 2011, according to EU statistics office Eurostat.
This means that 16.9m people in the eurozone are now out of work.
Youth unemployment in the euro-area also rose to 21.6pc in January, compared with 21.3pc in December. Eurostat said youth joblessness inSpain was just shy of 50pc, while Greek youth unemployment is now at 48.1pc.
Unemployment in Spain stood at 23.3pc in January, according to Eurostat (Photo: AFP)
and....
10.01 Bruno also highlights this admission by German ChancellorAngela Merkel in today's Sueddeutsche Zeitung newspaper:
Angela Merkel will agree to an increase in the eurozone's bailout fund - but not at today's euro summit.The German Chancellor told Sueddeutsche Zeitung that: "In the long run we cannot resist this pressure."
The dropping of Germany's opposition will allow the temporary European Financial Stability Facility to be combined with a new permanent European Stability Mechanism in the summer, taking the euro bailout funds to €750 billion.
The decision will allow the IMF to boost €150 million euros in promised resources form the eurozone to create a new €400 million facility for credit lines.
It will be controversial in Germany - German exposure to the debt crisis will rise from €211 billion to €280bn.
08.58 Bundesbank President Jens Weidmann issued a starker warningto Mr Draghi yesterday. He warned that the ECB's relaxation of rules could endanger its reputation. Mr Weidmann also said that risks stemming from some ECB policies could prove costly to Germany, which has bankrolled much of the eurozone's rescue operation.
In a letter to Mr Draghi obtained by Germany's Frankfurter Allgemeine Zeitung, he called for a return to the stricter rules in place before the financial crisis began.
08.49 Former ECB board member Lorenzo Bini Smaghi warns in this morning's FT that cheap loans create "a disincentive for eurozone commercial banks to restructure their balance sheets and strengthen their capital base," and stops them from standing on their own two feet. He writes:
Banks may become addicted to easy central bank financing and delay the adjustment indefinitely. This can be prevented only if supervisors put sufficient pressure on bank managers and shareholders to continue adjustment, and to use central bank funds only as a temporary, exceptional source of financing. However, supervision in the eurozone is implemented at national level, with little incentive to pursue these objectives rigorously and on a level playing field.08.45 The business pages are also filled with analysis of yesterday's second "Draghi bazooka" of emergency ECB loans, which blasted an additional €529.5bn into the European banking system. Ambrose Evans-Pritchard believes ECB President Mario Draghi has placed a €1 trillion bet with the latest round of his LTRO.
There is a dark side to the Draghi magic. Spanish banks used the first LTRO to boost holdings of sovereign debt by 29pc to €230bn, with a similar pattern in Italy. The weakest banks are buying the weakest government bonds, often in volumes that exceed their equity base.
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