http://www.telegraph.co.uk/finance/debt-crisis-live/9283848/Debt-crisis-live.html
A significant dilution of exiting agreements would damage confidence in all euro area agreements and treaties and strongly weaken incentives for national reform.
The Nikkei fell 2pc in Japan to 8,556.6 points, while the Hang Seng lost 1.3pc in Hong Kong.
The Greek population has voted in a particular way which is not conducive to the formation of a government. But at the same time, they very strongly support belonging to the eurozone. There's an inconsistency there.
It may be that members of the eurozone will be prepared to support more and for longer the Greek population to stay within the zone. The members may consider the integrity of the zone to be more important.
The long-lasting problems in Europe have been irresponsibly, widely underestimated... This debt crisis is only the tip of a much bigger, much deeper and much wider iceberg [...] It would be much better for Greece to leave the eurozone, which is almost not allowed, impossible and so on.
Warning that weak growth was putting the country at risk of permanently high unemployment, the Bretton Woods institution called for swift and co-ordinated action between the Bank and the Treasury.
11.45 Sticking with the German theme, the Bundesbank has stuck its oar into the Greek debate, telling the country it is putting any future financial aid at risk by failing to elect a government which promises to stick to the bailout terms.
The German central bank said:
A significant dilution of exiting agreements would damage confidence in all euro area agreements and treaties and strongly weaken incentives for national reform.
The Bundesbank said the system of eurozone central banks had assumed "considerable risks" by providing Greece with large amounts of liquidity.
"In light of the current situation, it should not significantly increase these risks," the bank said.
11.20 German bond market is a popular place to be, and so should the country's stock market, according to Rob Smith, investment manager of the Baring German Growth Trust at Baring Asset Management.
German shares have fallen today along with the rest of Europe, down 1.8pc, and have also declined in recent weeks along with the rest of the region. However given the German economy is export-led and in growth, this is not fair, Mr Smith argues.
German equities have seen some selling pressure in recent months along with the rest of the European equity markets, as investors continue to express concern over the future of the euro. Since the end of March, the DAX 30 Index has declined by 9.2pc in euro terms in an environment where the broader European market, as represented by the MSCI Europe ex UK Index, has fallen by 10.6pc.
This followed a period of very strong performance from the German market earlier in the year, particularly in March, so perhaps a degree of profit-taking was to be expected. However, while we appreciate that many investors are in “risk off” mode at the moment, we believe the decline in the German equity market is not justified by either economic or corporate fundamentals.
Our assessment of the situation at the moment, from the companies we have met and the earnings statements we have analysed, is that it remains very supportive for German corporates, with earnings likely to surpass last year’s level, in our view, and come out considerably ahead of the rest of developed Europe.
11.10 Germany has held a bond sale at which investors have rushed to buy the country's debt for no interest in return.
The zero percent bonds - what my colleague has described as a sophisticated mattress - give investors somewhere they regard as safe to park their cash.
Today, Germany sold €4.56bn of two-year bonds, which carry a sero-percent coupon, with an average yield of just 0.07pc. That's effectively free money for the German government.
The sale of zero-coupon bonds was announced yesterday, when the government said it would offer €5bn of the bonds.
Last week Germany paid the lowest rate in its history to borrow for 10 years, paying an average of 1.47pc.
By contrast, Spain's borrowing costs on 10-year governemnt bonds rose to 6.16pc and Italy's to 5.82pc
09.40 Two bits of economic news from the UK - the first, a surprise -retail sales dropped 1.1pc year-on-year in April, when economists expected them to climb 1pc.
Secondly, the latest Bank of England minutes are out, showing the nine Monetary Policy Committee members voted unanimously in favour of holding interest rates at 0.5pc, and voted 8-1 in favour of holding the quantitative easing programme at £325bn.
However, the decision was "finely balanced" for some MPC members, with rising inflation weighed against the eurozone crisis and economy going back into recession indicating that more QE could be needed.
07.50 But it won't be all Greek today - Spain is also going to be grabbing some headlines.
The country will set out its plans for Bankia, the lender which it had to part-nationalise earlier this month. Reports last week that customers had pulled €1bn out of the bank caused its shares to fall as much as 30pc.
The government is likely to confirm how much money it will pump into the ailing bank.
A Spanish government source told Reuters that talks on the size and form of the bailout - through loans, equity or cash injection - are being held between the economy ministry, the Bank of Spain, Bankia and Goldman Sachs, which was hired last week to value the lender.
A final decision may not be made before Economy Minister Luis De Guindos addresses a parliamentary committee (at 5pm London time) on the take-over of Bankia and the restructuring plan for the lender, although he will want to give key details of the government's strategy, the source said.
07.30 Markets in Asia declined today, as caution set in ahead of a meeting of European leaders following yesterday's rally.
The Nikkei fell 2pc in Japan to 8,556.6 points, while the Hang Seng lost 1.3pc in Hong Kong.
07.20 Sticking with the Greek theme, the country last night agreed to inject €18bn (£14.5bn) into four of its largest banks, with the money expected to come through as soon as today.
Bankers say the recapitalisation will allow National Bank, Eurobank, Alpha and Piraeus to receive funding from the European Central Bank (ECB) again.
The central bank cut off these Greek banks last week because they lacked enough capital to be considered solvent.
The Hellenic Financial Stability Fund said it had approved an agreement to release the funds, which will come in the form of notes issued by the EFSF, the eurozone's financial rescue fund.
07.15 An update from IMF chief Christine Lagarde, who has done an interview with Radio 4.
She's been talking pretty tough on Greece, saying "being part of the eurozone has a price".
The Greek population has voted in a particular way which is not conducive to the formation of a government. But at the same time, they very strongly support belonging to the eurozone. There's an inconsistency there.
She added that "somebody has to pay the price" of Greece's unmanageable debts.
It may be that members of the eurozone will be prepared to support more and for longer the Greek population to stay within the zone. The members may consider the integrity of the zone to be more important.
07.10 Meanwhile, the "Grexit" talk continues. Vaclav Klaus, the Czech president, said Greece would be better off economically if it exited the eurozone.
Following the NATO summit in Chicago. Mr Klaus last night said:
The long-lasting problems in Europe have been irresponsibly, widely underestimated... This debt crisis is only the tip of a much bigger, much deeper and much wider iceberg [...] It would be much better for Greece to leave the eurozone, which is almost not allowed, impossible and so on.
07.00 EU leaders will gather for a special summit today in Brussels. Top of the agenda? Greece and eurobonds.
German Chancellor Angela Merkel said yesterday that she found it“astonishing” that her pro-austerity stance was the cause of controversy in Europe, while Michael Meister, a member of Mrs Merkel’s Christian Democratic Union party, said there was nothing to stop France and Italy from going it alone on common bonds.
06.50 The IMF was in town yesterday, as the spotlight moved from events in the eurozone to more domestic affairs.
Christine Lagarde, the IMF's managing director, urged Britain to step up its recovery plan - or consider a Plan B. Philip Aldrick reports:
Warning that weak growth was putting the country at risk of permanently high unemployment, the Bretton Woods institution called for swift and co-ordinated action between the Bank and the Treasury.
If the joint efforts had failed to have much effect by November, the Government should then consider cutting taxes and boosting infrastructure spending by as much as £30bn, said the IMF.
In an unusually alarmist annual assessment of the UK, IMF managing director Christine Lagarde said that "growth is too slow and unemployment too high, and policies to bolster demand before low growth becomes entrenched are needed".
However, she stressed that austerity had been the right course for the UK, applauding George Osborne as "courageous" and insisting that fiscal stimulus should only be considered as a last resort.
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