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The Guardian - UK
The Guardian - UK
Business
Graeme Wearden (now) and Nick Fletcher

Greece, Germany and France agree to intensify talks – as it happened

Alexis Tsipras speaks with Angela Merkel during a round table meeting at the EU-CELAC summit in Brussels today.
Alexis Tsipras speaks with Angela Merkel during a round table meeting at the EU-CELAC summit in Brussels today. Photograph: Geert Vanden Wijngaert/AP

AFP’s Danny Kemp sums it up:

So I think we’ll wrap up now. Back (later) in the morning. Sleep well. GW

Updated

Greece’s PM touches on the need for a debt restructuring:

Tsipras: We agreed to keep looking for a solution

Tsipras is saying that the discussions with Angela Merkel and Francois Hollande took place in a “very good climate”.

The leaders have agree to continue their efforts to reach a solution, he adds.

Tsipras also sounded optimistic about prospects for a deal:

And that’s it? No word on budget surplus targets, or reforms? Or the rumour that Merkel supports a staggered deal, or that Greece wants a nine-month extension. Apparently not.

Here comes Alexis Tsipras, to face the media in Brussels.

Bonne nuit, Francois.

Updated

The Greek government has issued a statement, but it doesn’t say much... just that the talks were constructive, all sides agreed to intensify talks to bridge the differences, to deliver growth and sustainable debt levels.

Merkel, Hollande, Tsipras agree to intensify debt talks

Here’s the latest from Reuters:

The leaders of Germany and France agreed with Greek Prime Minister Alexis Tsipras on Wednesday that negotiations between Greece and its international creditors must be intensified to reach a deal to avert a Greek default.

A German government spokesman said after Chancellor Angela Merkel and President Francois Hollande reviewed the state of the talks with Tsipras on the sidelines of an EU summit in Brussels that the meeting took place in a constructive atmosphere.

The spokesman said in a statement:

“It was agreed unanimously that the talks between the Greek government and the institutions (IMF, European Commission and European Central Bank) should be pursued with great intensity,”

Brussels reporters are still waiting patiently (ish) for Tsipras, so we might hear something yet....

Updated

Ahha! Talks also took place in “a constructive atmosphere”. Another familiar phrase for eurozone crisis watchers....

Newsflash:

  • MERKEL, HOLLANDE, TSIPRAS AGREE GREEK DEBT TALKS WITH CREDITORS MUST BE INTENSIFIED - GERMAN SPOKESMAN

Surely that can’t be all?

Meeting over...Merkel leaves first

Angela Merkel is leaving the building for the night. She doesn’t speak, but apparently a diplomatic aide waves an apple at the media throng.

Good news -- Alexis Tsipras will speak to the media shortly. Not clear if it will be streamed live...

Brussels reporters say the meeting between Germany, France and Greece is breaking up now.....

Greek media: Nine-month extension requested

Greek media tonight are reporting that officials in Athens have made the bombshell admission that they have requested an extension of the country’s current bailout until March next year.

The request is believed to be at the root of the proposal being discussed tonight by the Greek leader Alexis Tsipras and his German and French counterparts.

The nine-month extension would tide Greece over the summer through the harnessing of funds from the European Stability Mechanism (presumably to cover Greece’s obligations to the ECB), according to the reports.

As relayed yesterday (including in this blog) March sees the official expiry of the International Monetary Fund’s participation in the debt-stricken nation’s bailout program. Prolonging the European side of the programme, which formally ended in December before being extended though to June 30, would allow Tsipras to begin implementing reforms (starting with privatisations) and give him the wiggle room to deal with dissent within his own radical left Syriza party.

It would also mean the can that is the Great Greek Debt crisis is kicked down the road once again.

Curious scenes at the exit of the Justus Lipsius building in Brussels, as journalists wait for the Tsipras-Merkel-Hollande meeting to finish:

New opinion polling from Greece shows that the public may be losing faith in Alexis Tsipras’s negotiating skills, but not in the eurozone itself.

Anyone else detect some slightly forced smiles?

Heads-up: Here’s a photo from inside tonight’s meeting between Hollande, Tsipras and Merkel.

Journalists in Brussels report that they’re not expecting any formal press conferences, but we might hear something at 11.30pm local time (10.30pm BST) -- perhaps only that the meeting has finished.....

S&P say they’ve downgraded Greece because they don’t see much chance of a deal in the next few days, and any arrangement might not last beyond September.

Great timing from Standard & Poor’s... they’ve just cut Greece’s credit rating by one notch, to CCC. That’s just two notches above default.

Thanks to Euronews’s Efi Koutsokosta, we know the meeting’s now begun....

Updated

Dinner is over..... which means Merkel, Tsipras and Hollande will now hold their much-anticipated meeting.

Evening summary

Time for a quick recap, while we await further developments in Brussels.

The leaders of Germany, France and Greece are due to hold a meeting tonight to discuss the measures the Greek government must take to receive desperately needed bailout loans.

Alexis Tsipras, Angela Merkel and Francois Hollande will speak on the sidelines of the EU-Latin America summit, (having wolfed down sole fillet and an intriguing strawberry pudding).

The meeting comes amid rumours that Germany might be prepared to give up some ground in the ongoing negotiations, as my colleague Phillip Inman explains:

According to the reports, the chancellor Angela Merkel is prepared to accept a much-reduced reform programme, slimmed down to just one or two areas as part of an initial package, to salvage a deal with Greece and prevent it exiting the eurozone.

Shares on the FTSE 100 moved ahead 76 points or 1.1%, while the German Dax and French CAC jumped 2.4% and 1.75%, respectively.

The European commission, the International Monetary Fund and the European Central Bank, which have lent Greece €240bn (£175bn) between them, had until recently demanded all-encompassing reforms in return for the last tranche of bailout funds worth €7.6bn.

News agency Bloomberg said it spoke to at least two German officials close to the bailout talks who described the compromise deal as a possible way to end the impasse between the radical leftist Greek government and its creditors.

The report, later denied by the German government as official policy, followed statements by Merkel and the French president, François Hollande, that they were ready to meet Greece’s embattled prime minister, Alexis Tsipras, at a summit in Brussels.

Greek Prime Minister Alexis Tsipras, center right, shakes hands with German Chancellor Angela Merkel, center left, at the start of a round table meeting at the EU-CELAC summit in Brussels on Wednesday, June 10, 2015. Greece’s prime minister was hoping to meet with the leaders of Germany and France in Brussels Wednesday, in the latest effort to break a bailout negotiation deadlock that has revived fears his country could default and drop out of the euro. (AP Photo/Geert Vanden Wijngaert)
Photograph: Geert Vanden Wijngaert/AP

Earlier, Merkel had raised hopes of progress by telling reporters “Where there’s a will, there’s a way”.

The European Central Bank has also shown it is still willing to support Greece, by raising the emergency liquidity on offer to its banks by another 2.3 billion euros.

And eurogroup president Jeroen Dijsselbloem has suggested a deal could be reached by the end of next week, if Greece compromises.

There is talk tonight that Athens could indeed shift its position, and accept its creditors proposal of a 1% primary budget surplus this year. It’s not clear, though, which cuts or tax rises it would implement to pay for this (or if it would be politically tenable)

And here’s that menu:

Hopefully they’ll give any leftovers to the ravenous press pack:

Day one of the summit is over, so leaders are tucking into a tasty feast: quail, then sole, then something clever with strawberries.

Italy’s finance minister has thrown his weight behind the idea of a Eurozone unemployment insurance scheme.

Under this plan, a euro country would receive help from its neighbours if joblessness rose too high.

Writing in the Guardian, Pier Carlo Padoan argued that such a joint insurance scheme for job-seekers would help Europe prosper.

Here’s the article:

Couldn’t Brussels bail out the jobless? | Pier Carlo Padoan

And here’s a flavour:

Reform of economic governance within the eurozone is also essential to improve the effectiveness of monetary union and foster greater cooperation in times of crisis. Structural reforms undertaken at national level must be better coordinated to maximise their impacts. We need to put a special focus on the social and employment side of structural policies, as an integral part of economic convergence in the euro area. Eurozone labour markets especially must be made more resilient. This could be done by introducing a common European unemployment insurance scheme.

This would complement ongoing reforms and boost the effectiveness of various national initiatives. Moreover, it would smooth demand and cushion the negative fallout of any future crises. Longer term, the eurozone should develop a proper stabilisation function to help it cope with what economists call asymmetric shocks – or events that strike one nation harder than others – leading to, among other things, a temporary spike in unemployment.

But this implies stepping up fiscal integration: in other words endowing the eurozone with a proper budgetary policy and a common budget, which should be part and parcel of any monetary union. It goes without saying that such fiscal integration would need to be designed to minimise moral hazard and avoid the need for permanent financial transfers between countries.

You can see why these are called “family photos” - half the group won’t stop chatting to pose for the picture (I’m looking at you, Mariano. Just because you’re in the second row...)

epa04792483 Leaders pose for a family picture at the European Union and Community of Latin American and Caribbean States (CELAC) summit in Brussels, Belgium, 10 June 2015. The EU-CELAC Summit brings together 61 European, Latin American and Caribbean leaders to strengthen relations between both regions. EPA/JULIEN WARNAND

Updated

Our spies in Brussels report that Angela Merkel is chatting with Evo Morales, the socialist leader of Bolivia.

Dutch finance minister Jeroen Dijsselbloem has declared that a deal can indeed by reached for Greece soon.

Dijsselbloem reckons it could be signed off by June 18, when the eurogroup of finance ministers (which he chairs) next meets. But Greece would need to produce more serious proposals.

He told a press conference in Helsinki that:

“We are still open to serious alternatives, but the alternatives of the last couple of days have not been of a high enough standard....

“In the last talks which I had together with President Juncker and Prime Minister Tsipras, we made quite clear that there is room to put in alternative measures, but… the bottom line is that it has to add up, because Greece has to become financially independent again.”

  • EUROGROUP’S DIJSSELBLOEM, ASKED ABOUT A 3RD BAILOUT FOR GREECE, SAYS CAN’T DISCUSS FUTURE IF NEGOTIATORS CANNOT AGREE WHAT TO DO TODAY
  • DIJSSELBLOEM SAYS ONLY A FEW ISSUES WITH GREECE REMAIN TO BE SOLVED, BUT THERE MUST BE TIME FOR TECHNICAL WORK BY INSTITUTIONS BEFORE EUROGROUP

Reuters has also established that a three-way meeting will take place tonight. The game is afoot!

Greek media: Tsipras might accept 1% primary surplus

Media reports in Athens are suggesting that the Greek prime minister could yield on a major sticking point: creditors’ demand for a primary surplus of 1% of GDP this year.

Helena Smith reports from Athens

Regular readers will recall that the government itself proposed the budget surplus should not exceed 0.6 % in its own 47-page proposal, submitted to creditors last week.

The news portal Newsit.gr is quoting commissioner Pierre Moscovici as saying:

“we are closer than ever before to a deal.”

An agreement may well be sealed when the Greek prime minister Alexis Tsipras sits down for talks again with EU commission president Jean Claude Juncker tomorrow.

Alexis Tsipras has helpfully tweeted a picture, showing he did indeed chat to Jean-Claude Juncker on the sidelines of the EU summit:

(OK, it might have been an aide who tweeted it; Tsipras has enough on his plate without handling social media too)

A German government spokesman has told Reuters it will only accept a deal approved by the three institutions (the EC, IMF and ECB). All else is “pure invention”, he says.

And back with Greece:

Here’s Jill Treanor’s report on Mark Carney’s speech:

Mark Carney is to warn City traders that they should face up to 10 years in jail for rigging and abusing markets as he pledged to end “the age of irresponsibility” that has gripped the financial sector.

The Bank of England governor acknowledged the economic harm caused by what he described as the “ethical drift” that took hold in the fixed income, currency and commodities (FICC) markets ahead of the financial crisis.

Around $150bn (£96bn) worth of fines have been imposed on major banks since 2008 depriving the real economy of $3tn of credit and potentially holding back the global economy, he said.

Carney will use his annual Mansion House speech to top City bankers on Wednesday night to concede that the Bank of England under his predecessor, Lord King, made its own mistakes during the crisis, failing to spot the risk building up in the system and failing to pump enough liquidity into crippled financial markets. The bank’s own arcane governance “weakened the social licence of markets”, he said.

Setting out four elements of a new approach to those financial markets which have not been directly regulated by the Bank of England or the Financial Conduct Authority, Carney will say a global approach to cleaning up market practices is necessary.

He is expected to say: “For the best of the industry this won’t be new. This is just how you run your business. But for others who free-ride on your reputations: the age of irresponsibility is over.”

Full story:

Bank of England governor unveils new clampdown on market abuse

Away from Greece for a moment, and Bank of England governor Mark Carney has announced plans for a clampdown on abuse in financial markets after a series of scandals.

Rogue traders in fixed income, currency and commodity markets would face up to 10 years in jail if found guilty, under the proposals.

Updated

More meetings. Greek prime minister Alexis Tsipras is set to meet EC president Jean-Claude Junker again tomorrow on the sidelines of the continuing summit with Latin American leaders. A Greek government official told Reuters:

The two leaders exchanged views in detail [earlier today] and in a constructive climate, while they agreed to meet again tomorrow.

Spanish economy minister Luis de Guindos has said creditor’ institutions have shown flexibility with Greece, adding: “Grexit is off the table, we want to keep Greece in the eurozone.”

Quotes courtesy Reuters.

Greek finance minister Yanis Varoufakis and Luis de Guindos (right0 earlier this year.a
Greek finance minister Yanis Varoufakis and Luis de Guindos (right0 earlier this year.a Photograph: Emmanuel Dunand/AFP/Getty Images

Updated

The reports of a possible breakthrough have sent markets sharply higher.

Germany’s Dax is now up 1.54%, France’s Cac has climbed 1.1% and the FTSE 100 has added 1%. On Wall Street the Dow Jones Industrial Average is up 1.3%.

Here’s the Bloomberg story on Germany’s supposedly attempt to bring a deal to the table:

Chancellor Angela Merkel’s government may be satisfied with Greece committing to at least one economic reform sought by creditors to open the door to bailout funds, according to two people familiar with Germany’s position.

While the Germans still insist on a package of steps that includes higher taxes, state asset sales and less generous retirement benefits, they may settle for a clear commitment by the Greek government to a measure up front to unlock aid, said the people, who asked not to be identified discussing the government’s negotiating stance.

With Greece’s aid program set to expire on June 30 and no deal in sight, the comments reflect more German flexibility than the government’s public statements. Merkel and French President Francois Hollande may hold talks with Greek Prime Minister Alexis Tsipras on the sidelines of a European Union summit on Wednesday to try to break the impasse...

While Tsipras could be given until next year to carry out changes, such as trimming retirement benefits, he would have to initiate at least one major overhaul if he wants to get aid flowing, the people said. Neither person specified which demand Greece should fulfill.

Merkel’s chief spokesman, Steffen Seibert, and his deputy Christiane Wirtz didn’t return text messages seeking comment. A German Finance Ministry spokeswoman declined to comment.

Full story here:

Germany to Consider Offering Tsipras Staggered Deal on Aid

Germany reportedly ready to offer Greece a staggered deal on aid

And if there is indeed a meeting there may be something to talk about, according to Bloomberg:

Updated

And there may well be a meeting after all:

The €2.3bn increase in the emergency liquidity assistance cap for Greek banks follows a €500m increase last week. It is the highest weekly rise since mid-February.

The incremental moves by the ECB keep the pressure on Athens to come up with a deal with its creditors.

Updated

But at least Greece appears to be getting continued support from the European Central Bank through the Emergency Liquidity Assistance:

Our correspondent Helena Smith flags up some possible protests tomorrow:

Updated

After days of decline, most markets are regaining a little of the lost ground at the moment. Wall Street has opened stronger, with the Dow Jones Industrial Average up 142 points or 0.8%.

In Europe Germany’s Dax has added 1.28% and France’s Cac is up 0.75%. In the UK, the FTSE 100 has added 0.6% but in Athens the Greek market has bucked the optimistic mood, down 0.9%.

Traders said the recent sell-off may have gone too far, although with the continuing inability to get a deal between Greece and its creditors, investors are likely to remain nervous.

Meanwhile the Greek economy continues to struggle:

Greece: No-one told us there was a problem....

Betwixt all the smiles, hugs and backslapping in Brussels this afternoon, the Greek government has issued a strongly-worded statement.

It bemoans the fact that they (apparently) learned about the negative response to its latest reform package proposal via today’s EC press conference and not from the EU monetary affairs commissioner himself.

The leftist-led administration says:

“The Greek side finds itself in the unfortunate position to have to point out that it was never informed about its proposals by Mr Pierre Moscovici.”

EU officials, though, insist Moscovici told the Greeks that their plan isn’t good enough:

Updated

It’s not a formal meeting, but we can report that Angela Merkel and Alexis Tsipras have shaken hands in Brussels, and shared a few words.

German Chancellor Angela Merkel (L) meets with Greek Prime Minister Alexis Tsipras (2ndR) while Cuba’s First Vice President Miguel Diaz Canel (R) looks on the start of an EU-CELAC Latin America summit in Brussels, Belgium June 10, 2015. Tsipras had flown to Brussels to meet Merkel and French President Francois Hollande, with time fast running out for the two sides to agree on a cash-for-reforms deal for Greece. But it was not immediately clear whether that meeting would take place, with European Union officials saying Greece’s latest offer had not gone far enough. REUTERS/Yves Herman
. Photograph: Yves Herman/Reuters
German Chancellor Angela Merkel (L) talks with Greek Prime Minister Alexis Tsipras (R) at the start of an EU-CELAC Latin America summit in Brussels, Belgium June 10, 2015. Tsipras had flown to Brussels to meet Merkel and French President Francois Hollande, with time fast running out for the two sides to agree on a cash-for-reforms deal for Greece. But it was not immediately clear whether that meeting would take place, with European Union officials saying Greece’s latest offer had not gone far enough. REUTERS/Yves Herman
. Photograph: Yves Herman/Reuters

And they’re off....

Angela Merkel will urge Alexis Tsipras to keep Greece’s officials negotiating with creditors in Brussels, when they speak on the sidelines of today’s EU summit.

I’ve taken the quotes from Reuters:

“The message will be: the talks with the three institutions must be continued,” said Merkel on arrival in Brussels, referring to the European Commission, International Monetary Fund (IMF) and European Central Bank.

“The goal is, we want to keep Greece in the euro zone,” she said, adding: “Where there is a will, there is a way.”

All isn’t lost. Jean-Claude Juncker just gave Alexis Tsipras a hug in Brussels.

Despite the EC president’s unhappiness over the Greek PM’s criticism of the creditors last week, the two men managed to put on a show of solidarity, at least.

A hug is a pretty standard greeting in the world of Juncker. Favoured colleagues run the risk of a sloppy kiss, while Hungary’s dictatorial prime minister earned a gentle (ish) slap last month.

Merkel: Where there's a will, there's a way

German Chancellor Angela Merkel arrives to attend a European Union and the Community of Latin America and Caribbean states (EU-CELAC) summit on June 10, 2015 at the European Union headquarters in Brussels. AFP PHOTO / EMMANUEL DUNANDEMMANUEL DUNAND/AFP/Getty Images

Angela Merkel has arrived in Brussels, telling reporters that “of course” she’ll meet with Alexis Tsipras if the Greek PM would like to.

So, the date is on!

The German chancellor also declared that ‘Where there’s a will, there’s a way’, when asked about the prospects for a breakthrough....

Alexis Tsipras has now raced from the Argentinian delegation to meet with European Council chief Donald Tusk.

Back in March, Tusk told the Guardian that Greece is a political and geostrategic problem, not simply a financial one.

“We have to understand, Greece is not only a question of money.... “Can you imagine Europe without Greece?

The former Polish PM is also a firm supporter of Russian sanctions, so may not be impressed by suggestions that Moscow could possibly help Athens.

Here’s a photo confirming that Greece’s pharmacies are shuttered today

As we flagged up this morning, it’s a protest against plans to liberalise the sector (so Greeks could buy over-the-counter drugs at the supermarket)

People walk past a closed pharmacy in Athens during a 24-hour strike as pharmacists protest against reforms in their sector on June 10, 2015. The European Commission said on June 10 it was not satisfied with Greece’s new bailout reform proposals, saying they “do not reflect” earlier discussions between Brussels and Athens. AFP PHOTO / Louisa GouliamakiLOUISA GOULIAMAKI/AFP/Getty Images

Updated

Alexis Tsipras got straight down to business in Brussels, with a sit-down meeting with the Argentinian delegation:

Will she or won’t she?

Germany is leaving the issue of a meeting between Angela Merkel and Alexis Tsipras hanging tantalisingly in the air. A spokesman in Berlin won’t confirm or deny any plans, but says the opportunity is there.

  • GERMAN GOVT SPOKEWOMAN SAYS CANNOT CONFIRM THAT MERKEL WILL MEET TSIPRAS IN BRUSSELS, BUT THERE WOULD BE OPPORTUNITY TO DO SO IF HE WANTS TO
  • GERMAN GOVT SPOKESWOMAN SAYS MERKEL WORKS VERY CLOSELY WITH FIN MIN SCHAEUBLE ON GREECE AND THERE IS MUTUAL TRUST
  • GERMAN FIN MIN SPOKESMAN SAYS WE ARE IN DECISIVE PHASE ON GREEK TALKS
  • GERMAN FIN MIN SPOKESMAN SAYS GREEK DEBT WRITEDOWN IS NOT A QUESTION FOR THIS GOVERNMENT
  • GERMAN GOVT SPOKESWOMAN SAYS MERKEL HAS NO CONDITIONS BEFORE POSSIBLY MEETING TSIPRAS

Tsipras to meet Tusk soon

The Greek prime minister will meet the president of the European Council, Donald Tusk, at 13.30 Brussels time on Wednesday, Reuters reports.

So, in around eight minutes....

Updated

Alexis Tsipras has now arrived in Brussels for today’s EU summit with Carribbean and Latin American nations. He’s still smiling, despite recent knockbacks.

Greek Prime Minister Alexis Tsipras, center, arrives for the EU-CELAC summit in Brussels on Wednesday, June 10, 2015. European leaders and their Latin America and the Caribbean counterparts meet on a biannual basis in an effort to maintain international and economic ties. (AP Photo/Francois Walschaerts)
Greek Prime-Minister Alexis Tsipras (2-L) is greeted as he arrives to attend a European Union and the Community of Latin America and Caribbean states (EU-CELAC) summit on June 10, 2015 at the European Union headquarters in Brussels. AFP PHOTO / PHILIPPE HUGUENPHILIPPE HUGUEN/AFP/Getty Images
Photograph: Philippe Huguen/AFP/Getty Images

The FT’s Peter Spiegel explains why Greece’s latest proposal falls short:

The Greek submission calls for a primary budget surplus -- revenues less expenses when interest on sovereign debt are not counted -- of 0.75 per cent of gross domestic product this year, rising to 1.75 per cent next year and 2.5 per cent in 2017. That is higher than originally suggested in a Greek counter-proposal, but still below the 1 per cent, 2 per cent and 3 per cent in an offer by creditors presented by Mr Juncker.

Officials believed that Mr Tsipras had agreed to the creditors’ targets during the Juncker meeting and were preparing a new plan on how to hit those levels. Instead, the new Greek submission changed the targets and provided no new proposals on underlying economic policies.

So, commissioner Pierre Moscovici has now demanded a rewrite, according to spokesman Margaritis Schinas today.....

EC: Juncker has no plans to meet Tsipras

EC spokesman Margaritis Schinas

The EC’s top spokesman, Margaritis Schinas, is facing the Brussels press pack now.

They’re eager to ask about Greece, and he’s equally keen not to give too much away.

Asked about the state of play with negotiations, he says that the ball is “clearly” in Greece’s court, and says the latest proposals fall short of what Greece has promised.

Schinas declines to say whether the EC is insisting on a 1% budget surplus this year. That’s a matter for the negotiating table, not the press room, he says.

Will president Juncker meet with Alexis Tsipras today?

There is nothing scheduled at the moment, Schinas replies. [reminder, there are reports that Juncker has lost patience with Greece now]

Updated

From Brussels, Spanish journalists Jorge Valero reports that creditors aren’t budging on Greek budget surplus targets.

They want Athens to commit to a primary surplus of 1% of GDP this year, rejecting the 0.75% it is offering, he says.

Updated

Leaders are arriving in Brussels for the Latin American summit; Brazilian President Dilma Rousseff is currently meeting Belgium’s Prime minister Charles Michel:

Belgium’s Prime minister Charles Michel (R) welcomes Brazilian President Dilma Rousseff prior to a meeting in Brussels on June 10, 2015. AFP PHOTO/JOHN THYSJOHN THYS/AFP/Getty Images

Own up, have any Greek readers been ordering owls?

Could it be related to ancient Greek currencies? Oliver Clarke of New College (hurrah!) reckons it might:

Despite the deadlock, Greece has just successfully auctioned almost €3bn of short-term debt.

That doesn’t solve its funding crisis, though. This money will be used to repay other short-term debt which matures shortly.

The buyers are probably Greek domestic banks, who are ‘rolling over’ their Greek sovereign debt holdings.

Greece’s latest proposal asks the European Central Bank to lift the cap which stops Greek banks from buying more of these bond - that seems very unlikely unless a deal is in sight.

Greek inflation, to May 2015
Greek inflation, to May 2015 Photograph: Elstat

Greece remains deep in deflation, as prices continue to be forced down across the country.

Elstat reports that the Greek consumer prices index fell by 2.1% year-on-year in May, unchanged from April.

If Angela Merkel and Francois Hollande do give Alexis Tsipras the cold shoulder tonight, the Greek crisis could then switch to the capital of Slovakia:

Updated

Demonstrators are already gathering in Brussels ahead of today’s summit:

Rumours are swirling that tonight’s informal meeting between the leaders of Greece, Germany and France might not happen!

A French insider has told Reuters that nothing’s scheduled in Hollande’s diary....

“No meeting is planned at this stage - we’ll see what happens when we get there.”

German officials are giving a similar line:

So, Alexis Tsipras faces the prospect of being snubbed by the leaders of the eurozone’s two largest members at the EU-Latin American/Caribbean summit.

A pedestrian passes the map of Greece that decorated the front store of a tourist office in Athens, Tuesday, June 9, 2015. Greek officials say they have made new proposals aimed to strike a quick deal with bailout creditors and unlock vitally needed rescue funds. (AP Photo/Thanassis Stavrakis)

Over in Greece, pharmacists have gone on strike.

They are protesting against foreign-imposed demands that the pharmaceuticals industry opens up to allow customers to buy medicines in supermarkets.

Helena Smith reports

Up and down the country pharmacies have brought down their shutters in a mass display of defiance over the industry being liberalized.

Pharmacists are enraged, that five years into the crisis, supermarkets will now be allowed to sell medications, a move that creditors say is long overdue and will boost competitiveness but which industry figures insist will undermine business.

The anti-austerity government is clearly taking sides. Addressing the matter yesterday the health minister Panagiotis Kouroumblis said:

“The institutions [EU and IMF] have obsessions which unfortunately cannot be explained … as there is no problem with the issue of competitiveness.

We are fighting to [stop] this obsession becoming reality. We will fight until the last moment.” <end>

Greece’s lenders, though, believe that Greece’s pharmacy sector lacks competition. They have also pushed for rules on opening hours, and how many customers each chemist can serve, to be liberalised too.

Michael Fuchs also denied that the German parliament could split over Greece.

Fuchs, who is deputy chairman of the CDU party, reckons that European leaders simply won’t agreed a deal that isn’t broadly similar to the old plan.

That means Angela Merkel wouldn’t need to put contentious plans before the Bundestag.

And while he hopes Greece says in the eurozone, he doesn’t accept that Grexit would scupper the single currency (as Tsipras argued in an interview yesterday).

Updated

Merkel ally: Greece's proposals aren't serious

Michael Fuchs

An influential member of Angela Merkel’s CDU party, Michael Fuchs, has just cast serious doubt on the chances of a breakthrough soon, in a Bloomberg TV interview.

Fuchs, who is the deputy parliamentary floor leader of Merkel’s conservative bloc, also criticised the Greek government’s latest proposal, which includes help from the eurozone bailout fund, and the ECB, to cover its funding needs this summer.

Here’s the key points:

Can Angela Merkel make progress with Alexis Tsipras at today’s EU summit?

It’s very difficult, becuase Mr Tsipras’s new proposal is ‘non-negotiable’, Fuchs replies.

It is far away from the bailout extension we agreed in February and what we agreed with Mr Samaras (Greece’s former PM).

If there is any change to the second [bailout] package, it must go to the Bundestag.

What they do at the moment is non-negotiable.

Can a deal be reached in time?

I hope a deal can be reached. But it is fully and only on Greece’ side.

Fuchs insists that he doesn’t want a Grexit:

We want Greece to stay in the euro, very much. It is our wish and will.....

But they need to come up with serious proposals, and what they are coming up with now is not serious at all.

Fuchs also criticised Greece’s finance minister Yanis Varoufakis, for telling Germany that they won’t get back all the money loaned to Greece and then asking for more help.

It is very hard to understand his position, Fuch concluded.

(I think that’s a reference to Varoufakis’s speech in Berlin on Monday night.)

Updated

Newsflash from Athens: Greece hasn’t had any feedback on its latest proposals, according to a government official.

Not encouraging...

Today’s EU-Latin American summit begins at 2pm Brussels time (1pm BST).

Alexis Tsipras’s best hope of cornering Angela Merkel and Francois Hollande for talks (assuming it happens) is probably in the evening.

Here’s the schedule

  • 14:00 - official welcome
  • 14:30 - opening session
  • 15:30 - first working session on “Reinvigorating the bi-regional partnership”
  • 17:00 - second working session on “Facing together global challenges”
  • 19:00 - social dinner

The summit continues tomorrow.

Updated

Back in the UK, the boss of Sainsbury has blamed “strong levels of food deflation” and “highly competitive pricing” for its latest drop in takings. Good news for consumers!

CLUNK. The yield on Germany’s 10-year bonds just hit 1%, up from 0.96% last night.

That means Germany’s benchmark government debt is offering its highest rate of return since last September 2014.

A blow to any investor who piled into safe-haven German debt in recent months, helping to drive the yield (or interest rate) to almost zero.

The City mantra used to be “never sell the bund”. But not any more.....

Updated

European markets fall again

European stock markets are falling again this morning, having hit their lowest level since mid-February yesterday:

European stock markets, June 10, 2015
European stock markets, June 10, 2015 Photograph: Thomson Reuters

Greece is one factor, of course, but traders are also reacting to the selloff in the government bond market.

Bond prices are falling, pushing yields higher, as the long bull market begins to unwind....

The general mood is the markets is quite glum, as Christ Weston of IG puts it:

There is little conviction in equity buying at present and clearly a catalyst is missing that would provide the confidence needed.

Wolfango Piccoli

Even though Greece is running short of allies in the eurozone, Wolfango Piccoli of Teneo Intelligence believes Tsipras will eventually be given a ‘take-it or leave it” deal.

He’s on Bloomberg TV, explaining that:

If you look around Europe, in Berlin, Paris, Frankfurt, the position has not change, they want Greece to stay in the eurozone”

But that deal could be hard to sell at home, and could potentially split the Syriza coalition of left-wing groups.

If Tsipras takes it to parliament it will get passed, because the opposition will support it.

But at the end, Tsipras might not have a majority any more.

Roger Bootle

Roger Bootle, the managing director of Capital Economics, believes it’s “only a matter of time” until Greece leaves the euro , and it would be in both sides interest to do so.

This is an economy where output has fallen by 25% - that is catastrophic, similar to the US Great Depression, he told Bloomberg TV.

We’ve seen nothing like it in an advance economy in the second half of the 20th century.

But doesn’t that prove that Greece must reform its economy, as its lenders demand?

Reforms are needed, Bootle agrees, but you simply cannot solve a problem of lack of demand with structural reforms.

In fact, some of those structural reforms will make the demand problem worse.”

Updated

Angela Merkel and Francois Hollande are not the only leaders the Greek prime minister Alexis Tsipras will be meeting on the sidelines of today’s EU/Latin America summit.

Helena Smith has the details:.

The Greek government has announced that Tsipras will be holding talks with a number of leaders from the region - many heroes of the radical leftist. In order of appearance, the Greek government has listed the interlocutors as:

  • President of Chile, Michelle Bachelet
  • President of Brazil, Dilma Rousseff
  • President of Bolivia, Evo Morales
  • President of Ecuador, Rafael Correa
  • Vice president of Cuba, Miguel Diaz-Canel
  • Foreign minister of Argentina, Héctor Timerman

Tellingly, the Greek government made the announcement hours after EU commission president Jean Claude Juncker, still clearly incensed over Tsipras’ denunciation of the proporsed reform package by lenders, let it be known that it would be “a waste of time” to meet the Greek leader.

Juncker said he would be better off meeting Latin Americans. And he’s sticking to that stance today:

Greece and creditors still disagree

Bloomberg is reporting that “no progress” has been made between Greece’s negotiators and the creditors in recent days:

So, Greece’s latest offer of budget surplus targets (close, but still below the old bailout targets) is still unacceptable.

That doesn’t bode well for Tsipras’s meeting with Merkel and Hollande this afternoon.

It may also dampen the mood at the European Central Bank, which will decide today whether to continue providing emergency liquidity assistance (ELA) to the Greek banking sector.

Updated

The Agenda: Greek PM to meet Merkel and Hollande (probably)

Good morning, and welcome to our rolling coverage of the Greek bailout crisis and other events across the world economy, the financial markets, and business.

Greece is running short of time, and allies.

Prime minister Alexis Tsipras is heading back to Brussels today for another meeting with the leaders of Germany and France, in yet another attempt to broach a compromise and unlock bailout funds for his country.

But the meeting with Angela Merkel and Francois Hollande, on the sidelines of the EU summit with Latin American and Caribbean nations, is unlikely to deliver a breakthrough, as Athens and her creditors remain divided over the measures that Greece must take.

There’s even some doubt that the meeting will actually happen, after one official warned:

“If there is no movement, there is no meeting,”

“Germany and France don’t see the point of a meeting for now.”

As we covered on Tuesday’s liveblog, Greece’s latest three-page proposal has been slapped down privately by EU officials, for still not going far enough on budget targets, pension reforms, VAT rates....

And the European Commission is also losing patience with Athens. An exasperated President Jean-Claude Juncker has told fellow commissioners that a new Tsipras meeting would be a “waste of time”.

So, something of a mess, given Greece’s bailout expires in under three weeks.

Also coming up today....

European stocks are expected to dip again today, extending the recent selloff. Here’s IG’s opening calls:

  • FTSE 6748 -5,
  • DAX 10990 -11,
  • CAC 4839 -11,
  • IBEX 10911 -27
  • MIB 22555 -28

UK supermarket chain Sainsbury’s is in focus, after reporting its sixth straight quarter of falling sales:

And late tonight in London it’s the Mansion House speech, where the chancellor and the governor of the Bank of England address the great and good of the City.

I’ll be tracking all the main events through the day....

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