Items of the day - the guardian liveblog

http://www.guardian.co.uk/business/2012/may/16/eurozone-crisis-greece-elections-stock-markets

My colleague Heather Stewart is analysing the data in more detail now....

9.30am: News in from Greece where our correspondent Helena Smith says there is one silver lining in the clouds that have gathered over the crisis-hit country -- its battered banks are about to receive a much-needed cash injection.

Helena writes:

The news that the EU has given its blessing to the release of €18bn in recapitalization funds for Greeks banks has been met with relief all round in Athens.

Greece's outgoing finance minister Filippos Sachinidis, attending last night's eurozone finance ministers' summit was told the long-awaited cash injection would be disbursed as early as today. And it is not as moment too late, say Greek officials and observers. "The banking system is in dire straits. This is very good news and shows that the EU is following through, it's acting on its promises and that in itself is an act of faith," Nikos Evangelatos, a prominent political commentator told radio listeners this morning.

With all the talk of a Greek exit from the 17-nation euro zone panic-stricken depositors have been rushing to withdraw savings from banks. Since Friday last, an estimated €1bn has been withdrawn from banks according to deeply concerned finance ministry officials. Recapitalisation of the Greek banking system – badly hit by their enforced participation in the country's unprecedented debt restructuring – is a major part of the second €130bn package of rescue loans agreed for Greece earlier this year by the EU, ECB and IMF, its 'troika' of creditors.Helena also reports that Greek officials are angry that this €18bn injection of funds wasn't released faster:

With the nation's economy effectively on its knees boosting liquidity is seen as the key to kick-starting growth. Apparently the €18bn tranche -- €50bn in total is due -- arrived at the Hellenic Financial Stability Fund (HFSF), an offshoot of the European Financial Stability Fund (EFSF) last week. But after the country's inconclusive elections officials in Brussels refused to release it. "We were furious," said one well-placed official who said the outgoing government had been "preoccupied" with the issue over the past week.

9.10am: Eurosceptic MP Douglas Carswell has declared this morning that all the "damned fools"* who claimed the eurozone would end in disaster have been vindicated.

Conservative MP Carswell blasted the UK Treasury for supporting the European policy of providing bailouts rather than allowing countries such as Greece to devalue. He claims the single currency risks losing several members - possibly even France.

From this blogpost:

Despite all the evidence to the contrary, the Treasury is still fixated with the idea that the Euro equals prosperity.

The question for the rest of us is no longer Greek Euro membership. It is can Italy, Spain and France remain in a currency union with a German-Austrian-Dutch bloc. And having escaped from Europe's recessionary mechanism, how quickly can our trade partners return to prosperity?

* - it's a quote from 19th century prime minister Lord Melborne, who said on Catholic emancipation in Ireland that "What all the wise men promised has not happened and what all the damned fools said would happen has come to pass".

8.33am: Italy's industry minister has claimed that the eurozone could definitely survive without Greece.

Speaking on a TV news programme this morning, Corrado Passera argued that a Grexit would not be terminal for the single currency. Passera said:

That the euro can continue to exist without Greece is a foregone conclusion.

He also blamed European leaders for pushing the country into such a perilous state, saying:

Europe has been unable to manage Greece's problems in the right way, and now it is making demands from Greece that are probably impossible.

(quotes via Reuters)

8.23am: There are very worrying signs in the bond markets this morning.

Spanish bond yields* are climbing. They hit a high of 6.52%, and are climbing close to that 7% that marks the 'danger zone' where a country cannot borrow affordably any more.

The spread between French and German bond yields has hit its widest level since early January. That's a sign that traders are treating France's debt as increasingly risky compared to Germany's (the benchmark), and is certainly not good news.

The yield on bonds issued by Greece after its debt swap, which mature in 2023, has just risen above 30%. That suggests a high risk of default.

* - broadly speaking, yields are a measure of the interest rate on a bond; a rising bond yield means the value of the debt has fallen.

8.18am: The euro is losing value against other currencies too this morning. In early trading it fell to $1.2682, a new four month low.

8.07am: As feared, European stock markets have opened sharply lower this morning. Banks and mining stocks are being hit hard, as investors across the region raced to sell shares in the face of the turmoil in the eurozone.

In London, the FTSE 100 has shed 75 points to 5365, its lowest level of 2012, and a fall of 1.1%. All but two stocks have fallen. The biggest losers include commodities giant Glencore, and miners Xstrata and Rio Tinto -- reflecting fears that the global economic growth could be crushed by the shockwaves caused if Greece crashed out of the eurozone and defaulted.

Other European markets are hitting their lowest levels for the year – or, in Spain's case, their lowest level since 2003. Here's a round-up:

Spanish IBEX: down 1.8% at 6576
Italian FTSE MIB: down 1.8% at 12062
German DAX: down 0.9%
French CAC: down 0.7%

7.55am: While much of Europe was asleep, Asian shares were falling as the full implications of the crisis hit home. Many markets hit their lowest levels since January.

Andrew Sullivan at Piper Jaffray summed up the mood thus:

Investors are thinking: We don't know what's going to happen with Greece, we don't know what's going to happen with Europe, we're just going to sit it out.

Nikkei 225: down 100, or -1.12%, at 8,801 (closed)
Hang Seng down 631, or -3.17%, at 19,263
Shanghai down 28 points, or -1.13%, at 2,459
S&P ASX down 102 points, or -2.35%, at 4,215
Sensex down 337 points, or -2.06%, at 15,991