Greek debt crisis sharpens, as US jobs report smashes forecasts – live updates (2024)

One last thing: Standard and Poors has downgraded Greece’s credit rating from B to B-.

Perhaps not the biggest surprise in the world...but in any case, here are the Reuters snaps:

• 06-Feb-2015 17:37 - S&P LOWERS GREECE SOVEREIGN CREDIT RATING TO B- FROM B
• 06-Feb-2015 17:42 - S&P - GREECE LONG-TERM RATING LOWERED ONE NOTCH TO ‘B-’ AND KEPT ON CREDITWATCH NEGATIVE
• 06-Feb-2015 17:43 - S&P - LIQUIDITY CONSTRAINTS HAVE NARROWED TIMEFRAME DURING WHICH GREECE’S NEW GOVT CAN REACH AGREEMENT WITH CREDITORS ON A FINANCING PROGRAMME
• 06-Feb-2015 17:43 - S&P - GREECE GOVERNMENT’S LIMITED CASH BUFFERS,APPROACHING DEBT REDEMPTIONS TO OFFICIAL PREFERRED CREDITORS CONSTRAIN NEGOTIATING FLEXIBILITY
• 06-Feb-2015 17:44 - S&P -PROLONGATION OF TALKS WITH OFFICIAL CREDITORS COULD LEAD TO FURTHER PRESSURE ON GREECE’S FINANCIAL STABILITY IN FORM OF DEPOSIT WITHDRAWALS

And that really is that. Back on Monday.

As the battlelines between Greek and the rest of the eurozone were drawn ahead of a key Eurogroup meeting next week, stock markets slipped back as investors reacted to the uncertainty. Higher than forecast US jobs data provided some support but not enough to drag most European shares into positive territory. The final scores showed:

• The FTSE 100 finished down 12.49 points or 0.18% at 6853.44
• Germany’s Dax dipped 0.54% to 10,846.39
• France’s Cac closed 0.26% lower at 4691.03
• Italy’s FTSE MIB fell 0.28% to 20,760.74
• But Spain’s Ibex edged up 0.36% to 10,573.1

As for Greece, the Athens market fell by 1.97% to 803.36, with the banking sector down 9.8% on fears about future financing if the country fails to solve its financial problems. But after several days of a whistlestop tour round Europe by the new Greek government, the Athens market actually rose 11.3% on the week, while the banks wer up 11.6%.

Over on Wall Street, the Dow Jones Industrial Average is currently up around 44 points or 0.25% after the US non-farm payroll numbers.

On that note, it’s time to close up for the evening. Thanks for all your comments, and we’ll be back next week.

And some Reuters snaps coming out of Greece:

• 06-Feb-2015 17:20 - GREEK GOVERNMENT OFFICIAL SAYS GREECE DOES NOT WANT REMAINING BAILOUT TRANCHES APART FOR 1.9 BILLION EURO PROFIT RETURNS FROM ECB
• 06-Feb-2015 17:22 - GREEK GOVERNMENT OFFICIAL SAYS NECESSARY FOR GREECE TO BE GIVEN ABILITY TO ISSUE MORE T-BILLS TO COVER ANY EXTRA NEEDS

More conflicting reports from Greece. Helena Smith reports:

Greek media are now reporting that the prime minister’s office is firmly rebuffing suggestions that the government will reject outright accepting any form of extension on the current bailout programme. Given the eurogroup president’s refusal to countenance a bridge loan that could tide the country over until it is able to present it’s own debt reduction proposals, Athens may well be reconsidering its options. Officials in the prime minister’s office are being quoted as saying they knew about the emergency Eurogroup meeting that will be held next Wednesday to discuss Greece, and “welcome the news and will present analytical plans then.”

You may recall that earlier we put a couple of photos of Greek finance minister Yanis Varoufakis on his phone, with my colleague Graeme wondering who he was phoning.

Well now we have an answer, from the man himself:

And more:

More eurozone bigwigs coming out with their advice to Greece, this time Klaus Regling, managing director of the European Stability Mechanism:

More from Reuters on the US comments on Greece:

The United States told Greece through its ambassador on Friday to work cooperatively with its European colleagues and the International Monetary Fund and that Athens needed to push ahead with reforms.

“Greece should continue to make administrative and structural reforms and exercise fiscal prudence,” the embassy said in a statement.

U.S. Ambassador to Greece David Pearce earlier met Prime Minister Alexis Tsipras and senior ministers from the recently elected leftist government.

Athens has been seeking support for renegotiating the terms of its international bailout and to end the austerity that is imposed by the EU and IMF with it.

Meanwhile the US stock market has opened, and despite the futures predicting a hefty double digit rise on the Dow Jones Industrial Average after the blowout non-farm payroll numbers, it hasn’t turned out like that so far.

The Dow is currently up just 11 points, as investors speculate the higher than forecast jobs and average earnings figures might prompt the US Federal Reserve to sanction an interest rate rise sooner than expected. Dr Harm Bandholz, chief US economist at UniCredit Research, said:

In its latest Federal Open Market Committee statement the Fed upgraded its assessment of the labor market from “solid” to “strong”. Today’s employment numbers unequivocally vindicated this wording change. Given the fact that most FOMC members see the plunge in oil prices, which will push inflation rates even lower in the coming months, as a positive for the US economy, we remain convinced that the Fed continues to get closer to its first rate hike.

Chair Yellen’s semi-annual monetary policy report before Congress later this month provides her with a good opportunity to prepare markets for further changes in the Fed’s rhetoric.

In the wake of the earlier meeting between Greek finance minister Yanis Varoufakis and a delegation from the US Treasury, Reuters has a snap outlining the view from across the Atlantic:

06-Feb-2015 14:40 - ATHENS- U.S. SAYS GREECE MUST MAKE REFORMS TO MEET INTERNATIONAL OBLIGATIONS, WORK COOPERATIVELY WITH EU, IMF

Some confusion surrounding supposed comments from Eurogroup president Jeroen Dijsselbloem:

Cyprus’s bailout programme has also hit a hurdle.

Its Troika of lenders have been unable to complete their latest assessment of its financial programme, because MPs voted last month to suspend a law to help banks to tackle bad debts.

In a statement today, the lenders say that reducing the high level of non-performing loans is essential to restoring growth and job creation in Cyprus.

Given the further suspension of the effective application of the foreclosure framework, reaching staff-level agreement on the review was not possible during this visit. The teams look forward to a timely completion of the review as soon as the conditions are in place for a positive conclusion.

Athens-based journalist Efthimia Efthimiou is hearing that the new Greek government fears it will “collapse” if it sticks with the old bailout promises.

Yanis Varoufakis has been working his phone inside the Athens parliament today....

Back to Greece.... and the Athens stock market has now fallen 3% as another gust of gloom sweeps through the trading floor.

That follows both sides taking a hard line ahead of next Wednesday’s eurogroup meeting.

As covered earlier, the German government wants Greece to turn up with a plan to deal with its debt problem, but the Greek government says it won’t accept a deal based on the old bailout.

It mean confrontation is looming...