• S&P decision on eurozone downgrades awaited
• Italy raises €7bn in debt auction as bond yields soar
• Greece begins talks on new bailout package
• Italian unions to stage three-hour strike in protest at austerity package
• Live blogging now: @alexhawkes
2.09pm: The British political right is 'the world's stupidest', according to the head of the French financial regulator the Autorité des marchés financiers, Jean-Pierre Jouyet.
For a long time it was said that the French right was the world's stupidest.
I think the English right has shown it is capable of being the world's stupidest, in serving purely financial interests and not the national interest. That's regrettable because we need our British friends in Europe.
Read the rest here.
1.34pm: Will David Cameron's veto help protect the City? My colleague Polly Curtis has been assessing what impact Cameron's efforts last week will have on the UK as a financial centre.
1.30pm: The euro is now down 1% against the dollar - a further indication that investors are unimpressed by what was announced last week.
The FTSE 100 is down 0.7%, the DAX 2% and the French CAC 1.5%.
12.42pm: Time for a lunchtime recap.
• Italian borrowing costs have climbed significantly, approaching 7%, the bailout threshold
• Italy's three largest unions have called a three hour strike.
• Standard & Poor's chief Europe economist has said another shock is required before all EU countries realise the gravity of what is in front of them, as the eurozone generally awaits possible sovereign downgrades by the credit ratings agency.
• French presidential election favourite Francois Hollande has said he will renegotiate last week's deal.
12.29pm: David Gow has been talking to EU officials about the viability of the new inter-governmental treaty between up to 26 EU nations (and not, of course, the UK).
Olli Rehn, EU economic and monetary affairs commissioner, is suggesting that supposed legal difficulties are overdone: "speculation that the treaty (on a fiscal compact) is not implementable is simply unfounded."
Commission officials were saying only yesterday it was far from clear that Friday's deal at 17-plus, particularly roles for the commission and ECJ and ECB, had a sound legal basis.
Rehn is now saying it is "better than than meets the eye" and is "bold and effective and legally viable." So, who decided that?
"We want a strong and constructive Britain in Europe and a Britain at the centre of Europe, not on the sidelines," he added, before suggesting that that does not mean protection for the City.
"If this move (Cameron's veto) was designed to prevent bankers and the City being regulated that's not going to happen."
11.47am: Tom Kington in Rome also has more on the strikes there.
Italy's three largest unions have called a three hour general strike for private sector employees today – to be held by workers at the end of their shifts – after Italian prime minister Mario Monti turned down their demand last night to go easier on pension cuts and the taxation of home owners in his austerity budget.
The three unions, CGIL, CISL and UIL, will also call strikes for bank staff on December 16 and for public employees on December 19.
Monti's emergency budget, which contains tax rises and spending cuts totalling €30bn, will be debated in parliament this week and may be finessed through amendments, with Monti hoping he has not exhausted the goodwill of MPs towards his technical government.
If unions are on the war footing now, they may get even more upset next week when Monti starts work on his planned reform of the labour market in Italy, part of his promised bid to free up the Italian economy. "That," said a CGIL spokesman this morning, "is a very delicate subject."
11.46am: Ian Traynor, The Guardian's European editor, passes on this snippet:
German govt tweeting that Britain "remains one of our most important partners and friends. close agreement for example in foreign and economic policy"
11.43am: Apologies for the lack of posts - we had a fire alarm here and were evacuated. All back now.
The big news is that those Italian yields keep on climbing. Yields on ten-year Italian bonds are up almost half a per cent at 6.821, as measured on Tradeweb.
The five-year bonds are at 7.1%.
10.48am: The chief economist of S&P Europe Jean-Michel Six, mentioned earlier, has been speaking at a business conference in Tel Aviv.
He told the audience:
There is probably another shock required before everyone in Europe reads from the same page, for instance a major German bank experiencing difficulties in the market. Then there would be a recognition that everyone is on the same boat, and even German institutions can be affected by this contagion.
Let's not raise expectations too high, there will be more summits. Time is running out and action is needed on both sides of the equation, on the fiscal and monetary side.
10.11am: Italy has raised €7bn in short-term debt, at a gross yield of 5.95%.
The offer was well-covered, with €13.5bn put up by investors.
10.03am: Standard & Poor's chief Europe economist Jean-Michel Six is speaking – unclear where at the moment – and has said that the summit made "progress", Reuters is reporting.
He said the summit made progress in the ECB becoming lender of last resort. Time is running out however, and action is needed on the fiscal and monetary side.
More soon…
9.58am: There is a lot of talk in the press today about the negotiations at last week's summit, and hints that Germany needs Britain to counter-balance the French influence.
A leader in Die Welt this morning, amid criticisms of Cameron and the British position, perhaps makes that point well.
Apologies for the rough (Google) translation, but I thought this bit was very interesting:
We need the British. And not, as Cameron dreamed after the summit, thus allowing the 26 to use the European institutions.
Europe needs the British as a pillar of the transatlantic bridge, the maintenance of cordial ties and strategic interest should not be neglected, especially not at a time when America seems to partner across the Pacific rather than trying to cross the Atlantic. Europe and the British needed a heavyweight liberal power.
9.32am: For those hankering after some coverage of the British political fallout from last week's summit, my colleague Andrew Sparrow is blogging the reaction here – ahead of David Cameron's statement to parliament this afternoon.
9.24am: The ECB has stepped in to prevent a surge in Italian government borrowing.
Reuters is reporting traders saying the ECB is buying short-term Italian government bonds.
The yields on ten-year bonds are up 20 basis points today, but the surge appears to have been pegged back slightly, with the yields at 6.56% now.
9.07am: Very interestingly, and as chrish notes below the line, Francois Hollande, currently well ahead in the polls ahead of an imminent presidential election in France, has said he will renegotiate the deal agreed last week.
This accord is not the right answer. If I am elected president, I will negotiate, renegotiate this accord.
Hollande wants a bigger ECB role and common European bonds.
Without economic growth we will achieve none of the targets on deficit reduction.
He said the accord did not work as a short-term or long-term solution.
France votes in two rounds – in April and May of next year.
9.02am: While we wait for Standard & Poor's verdict on the summit, Moody's has offered its view, and it isn't positive.
The absence of measures to stabilise credit markets over the short term means that the euro area, and the wider EU, remain prone to further shocks and the cohesion of the euro area is under continued threat.
The communique "offers few new measures," Moody's said:
Unless credit market conditions stabilise in the near future, our ratings of all EU sovereigns will need to be revisited. The communique does not change that view, and we continue to expect to complete such a repositioning during the first quarter of 2012.
8.51am: The agenda for today:
• Governments across the eurozone are anxiously awaiting a verdict from Standard & Poor's on possible downgrades following last week's summit. The credit ratings agency said it would deliver its decision as soon as possible following the summit, but we have no specific timetable.
• Italy is looking to raise €7bn in short-term debt today, in the form of Treasury bills, while France is hoping to raise €6.5bn through the same method.
• Italian unions are going on strike today over the country's austerity measures - in particular changes to government pensions.
• The Troika – the IMF, the ECB and the EU – are back in Greece to discuss the country's second bailout package.
8.33am: Wolfgang Münchau explores the legal difficulties in store for the proposed inter-governmental treaty in his FT piece this morning concluding:
To solve the crisis, the eurozone requires, in the long run, a fiscal union with a prospect of a eurozone bond and, in the short run, unlimited sovereign bond market support by the European Central Bank. What we now have is no treaty change, no eurozone bond and no increase either in the rescue fund or in ECB support.
Meanwhile Mayor of London Boris Johnson tackles Europe in his regular Telegraph column this morning. His words will surely be scrutinised for their political significance in understanding the position of senior Conservatives to last week's events. He writes:
No, [Europeans] aren't really angry with us for opposing the new Treaty for Fiscal Union. The reason our brother and sister Europeans are so chronically enraged with the British is that we have been proved completely right about the euro. For more than 20 years, British ministers have been coming out to Brussels and saying that they just love all this single-market stuff, but that they doubt the wisdom of trying to create a monetary union.
8.15am: For anyone interested in the Financial Services Authority's report into RBS, my colleagues Jill Treanor and Simon Bowers have been covering it here.
8.02am: Equity markets have not responded wildly this morning. The FTSE 100 is down just under 20 points, or by 0.3%.
The French CAC is down 0.8% and the German DAX is down 0.7%.
7.57am: Italian borrowing costs are rising again this morning, as the bond markets deliver something of a raspberry to last week's summit.
This morning Italian 10-year bond yields are up by 15 basis points and rising. The interest rate implied by that for Italian borrowing is 6.53%. That is short of the 7% bailout threshold, but heading in the wrong direction.
The yields have seen some fairly big moves in recent weeks – heading above 7% and then coming down under 6% last week. In any event, an increasing interest rate on Italian debt is the last thing Italian prime minister Mario Monti and other eurozone leaders wanted to see this morning.
7.51am: Morning everyone, and welcome back to our live coverage of the eurozone crisis.
This is the crisis, of course, that European politicians were expected to have solved once and for all at last week's summit meeting. And have they solved it? Not according to the UK press this morning.
The Guardian's leading article this morning says:
What emerged from Brussels is an agreement that failed to fix the structural flaws that threaten to destroy the euro. Indeed, in many cases, the accord may make those flaws worse.
The Telegraph, meanwhile, says this in its leader:
The plan to save the euro depends on the Germans being prepared to subsidise the Mediterranean countries, possibly indefinitely. But they may not be prepared to let the European Central Bank create the money necessary, which means that a viable agreement that saves the euro is very far from assured.
What has changed dramatically of course is the politics – with Britain cast out (or opting out, depending on your point of view) of negotiations.
As well as all the major political developments, everyone is eagerly anticipating a verdict from Standard & Poor's on the summit – which could mean the mass downgrade of several European countries' credit ratings, including France. The French themselves are trying to raise debt today, as are the Italians. We also have a strike in Italy, and more talks on a Greek bailout.
We will be tracking all the market reaction to today's events – with fears of a collapse following little sign of resolution last week. Italian bond yields are already rising...
Fiona Harvey, John Vidal 12 Dec, 2011 --
Source:
http://www.guardian.co.uk/business/2011/dec/12/debt-crisis-france~
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"...The more important thing is that during the past ten years, China's legal system has gradually caught up with the rest of the world's, and the Chinese market has been applying international regulations to control itself." [ 
