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Eurozone crisis live: Bankia shares plunge after reports of customers withdrawing funds
• El Mundo: €1bn taken out since Bankia nationalisation
• Vince Cable: Germany can solve the crisis
• Spanish bond yields rise at debt auction
• Prime minister will urge eurozone leaders to take urgent action to stem the crisis
• CEBR: Crisis could cost $1 trillion
11.51am: Shares in Spain's Bankia have now been suspended after plunging as much as 30% on the Madrid stock market, following those reports of customers withdrawing funds (see 11.17am for more)
11.31am: Vince Cable, the business secretary, said this morning that Germany can save the eurozone from disaster, pointing out that Europe's largest economy has done very well out of the single currency.
Cable told my colleague Dan Milmo that he was not "Apocalypse Now" about the eurozone. A stronger rescue fund to contain the crisis raging in Greece , and fresh interventions from the European Central Bank, could hold the single currency together.
Speaking from Ellesmere Port, where more than 2,000 Vauxhall car manufacturing jobs have been saved this morning, Cable said he confident of a positive outcome to the Greek crisis.
I am not Apocalypse Now about the European Union and the Eurozone. There are risks around Greece but Greece is a very small country. The significance of Greece is if you get contagion but I think that it is possible to be reasonably optimistic that Germany understands those risks and will put mechanisms in place. There are risks and worries and I am not minimising that. But there is every reason to believe that the EU will pull out of this crisis as Britain will.
Asked what 'mechanisms' he was referring to, Cable added:
We are talking about the firewall, the willingness of the European Central Bank to intervene, the understanding of the Italian and Spanish governments that if they play their part they will get back-up from, particularly, Germany. The Eurozone has advanced quite a long way from the peak of the crisis
It ultimately comes back to Germany thinking they have done extremely well out of the Eurozone, the competitive exchange rate. They have everything to gain from making sure this succeeds. And they are not just going to let it go down the pan.
11.17am: Shares in Bankia, Spain's fourth-largest bank, have tumbled by as much as 26% this morning. This follows a report that worried customers have withdrawn more than €1bn from their accounts since it was nationalised last week.
The El Mundo newspaper reported this morning that Jose Ignacio Goirigolzarri, the bank's new chairman, gave Bankia's board the information at a meeting this week.
Bankia, which was created from seven 'cajas' (savings banks) last year, was only floated on the stock market last July.
This graph shows how its share price tumbled in recent weeks, and is down 70% since flotation. That means huge losses for the many retail investors who took part.
10.31am: David Cameron has begun giving his speech in Manchester, warning about the dangers of the eurocrisis. He began by saying:
We are living in perilous economic times. Turn on the TV news and you see the return of a crisis that never really went away. Greece on the brink; the survival of the Euro in question. Faced with this, I have a clear task: to keep Britain safe. Not to take the easy course - but the right course. Not to dodge responsibility for dealing with a debt crisis - but to lead our country through this to better times.
Andrew Sparrow is covering the whole event here, in his Politics Live blog.
10.23am: A striking poster urging a No vote in Ireland's referendum on the EU fiscal treaty was erected overnight in Central Dublin:
It shows a European fist squeezing Ireland until it bleeds, and was put up by the Mandate union over its headquarters in Dublin's Parnell Square.
It appeared as the latest opinion polls send a warning sign to the Republic's governing parties. Just over a third of the Irish electorate remain undecided about what way to vote in a fortnight's time, according to respected polling firm Milward Brown.
From Dublin, Henry McDonald reports:
Around 35% of voters are in the "Don't Know" category with 37% saying they will vote Yes and 24% indicating they will vote No. This latest snapshot of Irish public opinion was taken amongst 1,000 voters on Monday and Tuesday for today's Irish Independent newspaper.
Of the two ruling parties Labour has the toughest task in securing a Yes vote on 31 May with 50% of their supporters saying they oppose the EU fiscal treaty, the poll found.
However a substantial majority of voters want the Republic to remain inside the euro currency zone with three out of every four polled stating they do not want Ireland to exit the euro.
The increase in the "Dont Knows" indicates that the Taoiseach Enda Kenny and his team still have a fight on their hands to persaude the Irish people to ratify a treaty that ties his government and all other states in the EU into tight budgetary controls.
The opposition to the treaty ranges from Sinn Fein and the United Left Alliance over to pro free market multi millionaire businessman Declan Ganley and his Libertas organisation. Even the British eurosceptic UKIP have entered the fray distributing tens of thousands of leaflets across Ireland urging voters to reject the latest EU treaty.
10.12am: The word from Westminster is that Downing Street officials are confirming that prime minister David Cameron will hold a conference call with François Hollande, Angela Merkel and Mario Monti this afternoon.
This will give the leaders of the UK, France, Germany and Italy a chance to talk ahead of this weekend G8 meeting, where Barack Obama is expected to urge Merkel to back a new eurozone growth package.
9.54am: Spain has seen its borrowing costs jump sharply at an auction of government bonds. That's worrying, but the good news is that it raised the funding it needed.
The interest rate, or yield, on €1.09bn Spanish bonds maturing in 2016 jumped to 5.106%, compared with 3.374% at a similar auction in March. That underlines the fears swirling through the eurozone.
Spain also sold €1.02bn of 2015 bonds at an average yield of 4.375%, up from 2.89% in April (a much calmer month).
In total, Spain managed to raise €2.5bn, which means it has met 55.8% of its gross funding programme for 2012.
Nicholas Spiro of Spiro Sovereign Strategy said it would be "painful" for the Spanish Treasury to be selling debt at such prices.
Spain is selling its debt at punitive rates against a rapidly deteriorating domestic and external backdrop. Eurozone "break-up contagion" is seeping into Spanish yields.
The Greek crisis is placing huge strain on peripheral eurozone bonds and European bank shares. Spain is on the sharp end of these fears. The Spanish government itself can do very little to shore up confidence in the near term.
Unless there is a bold and decisive response on the part of the eurozone, sentiment towards Spain will deteriorate further. This is a very slippery slope right now.
9.49am: More developments in Greece - Antonis Samaras, the conservative New Democracy party leader, has addressed his parliamentary group this morning saying "we are the front of resistance against catastrophe."
From Helena Smith in Athens:
The unilateral withdrawal from the EU-IMF sponsored loan deal keeping the Greek economy afloat would be tountamount to the destruction of the country, he said, attacking Syriza for its "lack of preparedness and inability" to govern.
Samaras spelt out "the nightmare" that would ensue if Greece gave up the euro.
Reverting to the drachma would mean wages being "cut in half, deposits being cut in half" and property prices being devalued. The price of imports would skyrocket particularly for food and gas.
"This is the nightmare that those who speak of a unilateral condemnation [of the loan accord] will bring us."
Looking visibly shaken, the ashen-faced Samaras who had been a vociferous supporter of Greeks going to the polls "as early as possible" after the emergency interim government of Lucas Papademos took over last November, said Greece's national interests would also be threatened.
"Greece in Europe is protected nationally and geopolitically," he said. "If we become isolated we will find ourselves totally vulnerable with many around us being tempted to exploit our weakness," he said.
With the new caretaker government in power the speech in effect kicked off the electoral campaign. Alexis Tsipras' will also address his parliamentary group at 1:30 PM (11.30am BS) (as I type, his speechwriters are sharpening their pens).
9.30am: We're hearing that Alexis Tsipras, the head of the Syriza party whose popularity has surged recently, will travel to France and Germany next week to discuss the crisis.
More from Helena.
Senior cadres in Syriza, the radical left group which looks poised to emerged as the biggest party in next month's elections, have just confirmed that Alexis Tsipras, its leader, will be visiting Berlin and Paris for talks next week.
The 38-year-old, who has sent shockwaves through EU capitals saying that Greece can no no longer commit to the onerous terms of €130bn loan agreement it has signed up to with the EU and IMF, will be departing from Athens for Berlin on Monday.
It's not clear yet who Tsipras will be meeting.
9.25am: News in from Greece, where our correspondent Helena Smith says the country's interim caretaker government has just been sworn in.
Helena writes:
In what will go down in modern Greek history as one of the smallest cabinets ever, it is comprised of 16 ministers, mostly university professors and diplomats.
The swearing in of the new cabinet followed a similar ceremony for new prime minister Panaghiotis Pikramenos. In another first the make-up of the new government was announced at dawn. A high court judge, Pikramenos takes over from former vice president of the European Central Bank Lucas Papademos who left the post warning that Greeks hadn't made sacrifices for "an empty shirt" but to put the debt-stricken Greek economy back on track. "There are those who are waiting to benefit from the chaos that will follow the humbling exit of the country from the common currency," he said.
9.15am: Benedict Brogan of the Daily Telegraph has a good take on David Cameron's upcoming address in Manchester:
'The Prime Minister's speech is the verbal equivalent of grabbing the Germans by the lapels and shouting 'do something'.
8.51am: Shares have fallen in major European stock markets today, but we're not seeing a repeat of Wednesday's selloff.
FTSE 100: down 19 points at 5384, - 0.36%
CAC: down 10 points at 3038, - 0.34%
DAX: down 3 points at 6380, - 0.06%
Mike McCudden of Interactive Investor said markets remain on a "negative trajectory", despite some traders reckoning that the crisis might prompt yet more quantitative easing from the world's central banks.
Volatility will remain until the markets have some comfort over Greece and the elections on the 17th June are looking more like a vote on whether they stay in the Euro despite local public opinion.
8.48am: There are reports from Italy this morning that Mario Monti, Francois Hollande, Angela Merkel, David Cameron and Herman Van Rompuy will hold a videoconference this afternoon, ahead of a meeting of G8 leaders this weekend. Nothing official yet...
8.38am: New economic data from Spain has confirmed that its economy shrank by 0.3% in the first three months of 2012, which put it officially back into recession.
No relief for the Madrid government, as it battles record unemployment and the crisis in its banking sector.
Spain will be in the spotlight this morning, as it holds an auction of government debt.
8.35am: $1,000,000,000,000. That's the cost of a disorderly, badly managed Greek exit from the eurozone, according to the Centre for Economics and Business Research.
The CEBR warned this morning that the end of the euro in its current form is certain. But while a well-managed Greek exit might only knock 2% off global GDP, the worst-case would see a 5% drop in global output (or $1 trillion).
CEBR's Douglas McWilliams said: "The economic consequences depend on the timing and the way in which the euro splits. There is no doubt that when the euro breaks up it will be costly.
Some countries will lose around 10% of annual GDP. But this will happen anyway – the choice is between a period of austerity followed by the impact of the end of the euro and then some eventual recovery OR facing the trauma of the end of the euro early and then starting to get the recovery underway."
More details in our front-page story here.
8.15am: The fact that David Cameron will make such a blunt intervention on the eurozone later today underlines the desperately serious nature of the crisis.
The prime minister's message to Europe will be delivered in the city of Manchester. It appears to be partly a message to his European counterparts, and partly a signal to domestic voters that he will do everything possible to keep Britain safe.
Here's what we expect the prime minister to say:
Either Europe has a committed, stable, successful eurozone with an effective firewall, well capitalised and regulated banks, a system of fiscal burden sharing, and supportive monetary policy across the eurozone, or we are in uncharted territory which carries huge risks for everybody.
"But be in no doubt: whichever path is chosen, I am prepared to do whatever is necessary to protect this country and secure our economy and financial system.
Cameron may also repeat his line from Prime Minister's Questions yesterday that the eurozone "either has to make up, or it is looking at a potential break-up".
Our politics editor, Patrick Wintour, also reports this morning that Treasury insiders has been criticising Germany for demanding too much from peripheral countries. UK sources claim the Westminster government has long been pushing for eurobonds (collective borrowing) and a looser monetary policy.
But while Britain is badly exposed to the eurocrisis, Cameron's ability to influence events is limited. As political commentator Gaby Hinsliff points out this morning, it's not ideal for governments to be warning of problems they can't solve.
..& that's a dangerous position for govt to be in. warning of perils ahead, sounding rather powerless to stop it.
— Gaby Hinsliff (@gabyhinsliff) May 17, 2012
8.10am: Good morning, and welcome to our rolling coverage of the eurozone financial crisis.
Coming up ... David Cameron is due to warn of the desperate consequences of a eurozone break-up. In a sign that the crisis is dominating the political world, the UK prime minister will argue that eurozone leaders must urgently create closer fiscal ties and an effective firewall to prevent their currency union imploding.
More on that shortly.
In Greece, the new caretaker government will be sworn in this morning. Outgoing prime minister Lucas Papademos has warned that the country stands at a "critical crossroads", but insisted that it can return to "stability, sustainable development and social prosperity".
In the financial markets, yesterday morning's mood of panic has been replaced by a sense of weary unease. Asian markets have clawed back some losses overnight, as traders hunker down for weeks of uncertainty until the Greek elections of 17 June.
Graeme Weardenguardian.co.uk © 2012 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds
David Cameron urges eurozone to follow UK model for recovery
Cameron warned the eurozone it was at a crossroads and urged it to adopt its own pro-business, pro-growth agenda
David Cameron has called on the eurozone to take a leaf out of the UK's book in order to overcome its current crisis, insisting that the British economy was "moving in the right direction".
The government's austerity measures have been blamed by Labour for the UK suffering a double-dip recession, but the prime minister said the UK had achieved a balance between deficit reduction and growth that was lacking in the eurozone.
"Just as in Britain we need to deal with the deficit and restore competitiveness, so the same is true of Europe," he said. "This is a debt crisis. And the deficits that caused those debts have to be dealt with. But growth in much of the eurozone has evaporated completely. Indeed without the recent German growth figures, it would be in recession."
Polls show support for the government's economic policy receding in the face of criticism that not enough is being done to stimulate growth.
But Cameron said the government had taken "active interventions such as credit easing, mortgage indemnities for first time buyers and guarantees for new infrastructure projects" and urged the eurozone to adopt its own "pro-business, pro-growth agenda".
Speaking in Manchester on Thursday, the prime minister said that the eurozone crisis, uncertainty over the direction of the global economy and the struggle to recover from recession at home, meant the UK was living through "perilous economic times".
He painted a bleak picture of the threat posed to the UK by events in Greece. "The eurozone is at a crossroads," he said. "It either has to make-up or it is looking at a potential break-up. Either Europe has a committed, stable, successful eurozone with an effective firewall, well capitalised and regulated banks, a system of fiscal burden sharing, and supportive monetary policy across the eurozone. Or we are in unchartered territory, which carries huge risks for everybody."
Cameron said that Britain could not cut itself off from what was happening elsewhere, but that he would "do what it takes to shelter the UK from the worst of the storms". Warning of "dangerous voices" urging the government to retreat on cutting the deficit, he said: "Deficit reduction and growth are not alternatives. Delivering the first is vital in securing the second. If markets don't believe you are serious about dealing with your debts, your interest rates rocket and your economy shrinks."
Ahead of Cameron's speech, the shadow chancellor, Ed Balls, accused the prime minister of using the eurozone crisis as an excuse for Britain's problems.
"David Cameron must wake up to the fact that our economy has not grown for over a year and a half on his watch," he said. "When countries like France and Germany have avoided recession, despite the eurozone's problems, it's clear Britain's double-dip recession was made in Downing Street."
The business secretary, Vince Cable, speaking from Ellesmere Port, where more than 2,000 Vauxhall car manufacturing jobs have been saved, told the Guardian he was confident of a positive outcome to the Greek crisis.
"I am not Apocalypse Now about the European Union and the eurozone. There are risks around Greece but Greece is a very small country. The significance of Greece is if you get contagion, but I think that it is possible to be reasonably optimistic that Germany understands those risks and will put mechanisms in place.
"There are risks and worries and I am not minimising that. But there is every reason to believe that the EU will pull out of this crisis as Britain will."
Asked what mechanisms he was referring to, Cable said: "We are talking about the firewall, the willingness of the European Central Bank to intervene, the understanding of the Italian and Spanish governments that if they play their part they will get back-up from, particularly, Germany.
"The Eurozone has advanced quite a long way from the peak of the crisis. It ultimately comes back to Germany thinking they have done extremely well out of the eurozone, the competitive exchange rate. They have everything to gain from making sure this succeeds. And they are not just going to let it go down the pan."
- Eurozone crisis
- European Union
- European monetary union
- Economics
- Banking
- European banks
- Financial crisis
- Financial sector
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SFO make arrests in football apprenticeship investigation
The Serious Fraud Office gave a provisional estimate of £1.6m for the fraudulent claims suspected to have been made by Luis Michael Training
Former Welsh international footballer Mark Aizlewood is believed to be among three men arrested in dawn raids by 70 police and fraud officers probing an alleged £1.6m plot to defraud the government's Skills Funding Agency by inflating the number of football coaching apprenticeships overseen.
Aizlewood, who played for Charlton Athletic in the 1980s and Bristol City in the early 1990s, was among four director-shareholders of Luis Michael Training (LMT), a firm set up three years ago to enrol, assess and verify numbers of young people working on apprenticeships and NVQs in community sport, mainly through football clubs and coaching companies.
Previously confronted with allegations of alleged irregularities around LMT's dealings with further education colleges, all associated with the company had insisted they were blameless. The Serious Fraud Office on Wednesday night gave a provisional estimate of £1.6m for the fraudulent claims suspected to have been made by LMT. Three men arrested and questioned have been released on unconditional bail.
Some £6m of government funds had been poured into the football coaching scheme through the Skills Funding Agency. Overseen by Newport-based LMT, the scheme developed links to clubs such as Leeds, Millwall and Nottingham Forest. LMT was subject to a compulsory winding-up order last October, brought on behalf of Sparholt College in Hampshire. Last accounts show Chepstow-based Aizlewood's consultancy firm had charged LMT £133,257 in fees.
Geoff Russell, chief executive of the Skills Funding Agency, announced in February that he was to step down this summer. The agency is facing mounting allegations that public money has been misused by a number of training providers. A year ago Russell wrote to skills minister John Hayes warning such activity was "likely to increase in the context of funding challenges and greater levels of sub-contracting".
This week the government ended a welfare-to-work contract with Sheffield-based A4e, and an eighth person was arrested on Monday in connection with a fraud investigation into activities at the firm's office in Slough, Berkshire.
The Serious Fraud Office, which is involved in the investigation because it involves public funds, said: "It is suspected that LMT produced false documentation, including registration papers, progress reviews and coaching examination certificates to falsely show to further education colleges and examining boards that training and apprenticeship placements had been successfully achieved and completed.
"Through the colleges, LMT received payment for each apprentice enrolled and placed with an employer. The colleges were, in turn, funded through a government scheme overseen by the Skills Funding Agency."
Simon Bowersguardian.co.uk © 2012 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds
Google 'Knowledge Graph' turns entire internet into one big Wikipedia
Sterling outlook: What next for the pound?
General Motors saves Vauxhall factory at Ellesmere Port
Feared closure averted as GM announces that next Astra car model will be built at Merseyside and Polish plants
The Vauxhall car plant at Ellesmere Port has been saved from closure, preserving 2,100 jobs and creating hundreds more, after workers accepted a deal that will see the next-generation Astra car built at the factory.
The business secretary, Vince Cable, is visiting the plant on Thursday to mark an agreement that, in a rare reversal of industrial fortune, could lead to the closure of a sister plant in Germany.
The European arm of General Motors, Opel/Vauxhall, will split production of the new Astra model between the Merseyside site and a plant in Gliwice, Poland; with Opel's factory in Bochum, Germany, likely to lose out as a consequence.
Ellesmere Port and Bochum had been singled out by GM executives as the plants most likely to close, triggering frantic lobbying by British politicians and trade union officials that appears to have paid off. GM is attempting to cut losses at its European operations that reached $747m (£470m) last year.
Workers at the plant voted by 94% in favour of new pay and conditions under the deal, clearing the way for the investment to go ahead.
Cable told the Guardian the government had serious concerns over the future of Ellesmere Port earlier this year. "At the beginning we were very concerned because it was clear that GM were committed to substantial downsizing in Europe. But we thought that this was one of the most productive plants and it was not being fully utilised. We had a good story to tell about the British car industry." Cable said the plant had been saved by a "team UK effort" that included officials at the Unite trade union, led by former general secretary Tony Woodley.
Asked about the Bochum plant, Cable said: "I don't want to be triumphalist but the fact that they have chosen to commit to the UK rather than the German plants is a significant statement in a way.
"But rather than dance up and down on Germany I would prefer to leave it as a positive story for us."
Welcoming the news, David Cameron said: "This is excellent news for Ellesmere Port and for UK manufacturing. Once again we have seen the success of the UK automotive industry and the crucial role it plays in growing and rebalancing our economy.
"This has been a real team effort with the government, the company, unions and workers all focused on keeping production in the UK."
The government is expected to support the expansion of Ellesmere Port through supply chain and apprenticeship initiatives.
Unite's general secretary, Len McCluskey, said the plant's future had been guaranteed into the next decade.
"This is extremely good news for Ellesmere Port. The company has made an offer to the workforce, which our members have accepted.
"From a position of uncertainty earlier this year, there is now a potential for a future at the plant until 2020 and beyond, and with that, 700 new skilled jobs at Ellesmere Port itself, and possibly hundreds more in the supply chain."
The site is 50 years old this year and employs 2,100 workers, plus a further 700 suppliers on the site. The directly employed staff have accepted a new labour agreement that includes a pay deal. Woodley played a key role in negotiating the deal, which will see Ellesmere Port ratchet up to a 24-hour production cycle, from two daily shifts to three.
GM is not the only carmaker scrutinising its European operations. Analysts believe the industry in Europe is more than 1m units over capacity — the equivalent of five factories too many. GM owns seven plants in Europe, including a van factory in Luton, which is not under immediate threat. Ellesmere Port builds the Astra Sports Tourer, making 140,000 models last year. The plant was built in 1962, producing its first car, a Viva, two years later.
The doubts over Ellesmere Port's future have been the only cloud over a UK car manufacturing industry that is enjoying a renaissance from the post-crash lows of 2008-09.The UK made about 1.35m cars last year, an increase of around 6% on 2010. A large contributor to the boom is demand in emerging markets for premium cars, such as Minis, Land Rovers and Bentleys – all made in the UK.
However, the mass-produced market has been suffering across Europe and Ellesmere Port has been caught by that crisis. Nonetheless, other mass producers based in the UK, such as the Japanese trio of Honda, Toyota and Nissan – the biggest car producer in the UK, have boosted their British production plans in recent months.
Dan Milmoguardian.co.uk © 2012 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds
Credit card firms misleading customers over payment deadlines, with the worst levying £12 late fees unjustly
Santander UK says British savers' money is safe after Kent County Council pulls account
Ring of fire: Hundreds of millions to witness 'annular' solar eclipse this Sunday
Cameron delivers speech on euro crisis and UK economy: Politics live blog
Rolling coverage of all the days's political developments as they happen, including David Cameron's speech on the euro crisis and the UK economy
11.30am: David Cameron is taking part in a video conference with his fellow EU leaders who are attending this weekend's G8 summit in America this afternoon, Downing Street has revealed. My colleague Nicholas Watt has the details on Twitter.
PM to hold vid conf at 4.15 with Merkel, Hollande, Monti, Van Rompuy + Barroso - EU reps at #G8
Video conf was idea of Herman Van Rompuy - agreed a week ago - to discuss EU positions ahead of #G8
Vid conf: only PM's 2nd conversation with Francois Hollande. 1st chat election night #G8
11.21am: Chuka Umunna, the shadow business secretary, says Cameron has "his head in the sand". Cameron has run out of excuses for the fact that the economy has failed to grow, Umunna tells BBC News.
11.17am: Cameron did do a Q&A session with journalists after the speech. As soon as it pops up on BBC News or Sky, I'll cover it.
11.16am: The full text of David Cameron's speech is now on the Number 10 website.
11.09am: Cameron winds up with a "whatever it takes" declaration.
I cannot predict how this crisis will end for others. And I cannot pretend that Britain will be immune from the consequences, either. But this I can promise: that we know what needs to be done and we are doing it.
Get the deficit under control, get the foundations for recovery in place, defend the long-term interests of our country and hold our course.
As prime minister, I will do whatever it takes to keep Britain safe from the storm.
11.08am: Cameron says globalisation offers big opportunities for the UK.
As nations get richer they spend more money on products where Britain excels. On everything from financial services and pharmaceuticals to jet engines, music and computer games.
The globalisation of demand means new countries demanding our products, fuelling new jobs at home.
11.05am: Cameron says that, although the Doha trade round is "going nowhere", that does not mean countries like Britain cannot promote free trade.
There is good work from Doha that we can salvage. Like the measures to break down the bureaucracy over getting goods across borders. I want to see a commitment to open markets and to rolling back protectionist measures already in place.
And most importantly, I want us to move forwards with "coalitions of the willing", so countries who want to, can forge ahead with ambitious deals of their own because we all benefit from the increased trade and investment these deals foster.
Cameron says that means getting EU trade deals finalised with India, Canada and Singapore. The EU should also open negotiations with Japan and the US, he says. A trade deal with the US would be "the single biggest bilateral deal that could benefit Britain".
11.03am: Cameron says there also needs to be action at a global level.
So over the coming weeks I'll be flying to Camp David and to Los Cabos in Mexico to fight for what is right for Britain at the G8 and G20 summits.
That means committing together to make the reforms we need to our economies to get growth in the global economy working again, including involving organisations like the IMF. It means persisting with reforms to make our banks safe, by implementing high-quality, global financial regulatory standards. It means recognising the risks to the recovery from rising and volatile energy prices and working together to ensure our energy security. And most of all it means getting together to give the world economy the one big stimulus that would really make a difference an expansion of trade freedoms, breaking down the barriers to world trade.
11.00am: And, third, Europe needs to address its "low productivity and lack of economic dynamism", he says. The single market needs to be completed.
And then Cameron issues his "eurozone at a cross-roads" warning.
The Eurozone is at a cross-roads. It either has to make-up or it is looking at a potential break-up. Either Europe has a committed, stable, successful Eurozone with an effective firewall, well capitalised and regulated banks, a system of fiscal burden sharing, and supportive monetary policy across the Eurozone.
Or we are in unchartered territory which carries huge risks for everybody. As I have consistently said it is in Britain's interest for the Eurozone to sort out its problems.
10.59am: Back to the speech. Cameron says the second thing that needs to happen is more political cooperation in the eurozone.
Second, the Eurozone needs to put in place governance arrangements that create confidence for the future. And as the British Government has been arguing for a year now that means following the logic of monetary union towards solutions that deliver greater forms of collective support and collective responsibility of which Eurobonds are one possible example. Steps such as these are needed to put an end to speculation about the future of the euro.
10.57am: BBC News are now broadcasting the Cameron speech. They weren't able to show it live for technical reasons. At the moment I'm ahead of the BBC broadcast.
10.52am: Cameron says three things need to happen for the eurozone to function properly.
First, the high-deficit eurozone countries need to address their problems.
First, the high deficit, low competitiveness countries in the periphery of the Eurozone do need to confront their problems head on. They need to continue taking difficult steps to cut their spending, increase their revenues and undergo structural reform to become competitive. The idea that high deficit countries can borrow and spend their way to recovery is a dangerous delusion.
But this will only be able to happen if the rich countries in the eurozone and the European Central Bank do more to support countries like Greece.
So I welcome the opportunity to explore new options for such monetary activism at a European level, for example through President Hollande's ideas for project bonds. But to rebalance your economy in a currency union at a time of global economic weakness you need more fundamental support.
Germany's finance minister, Wolfgang Schäuble is right to recognise rising wages in his country can play a part in correcting these imbalances but monetary policy in the Eurozone must also do more.
10.49am: Turning to the euro, Cameron says that without Germany, the eurozone would be in a recession.
I realise that countries inside the Eurozone may not relish advice from countries outside it - especially from countries, such as Britain, with debts and difficulties of their own.
But the eurozone crisis affects the UK, he says. As Sir Mervyn King, the governor of the Bank of England, said yesterday, the eurozone crisis poses the biggest threat to the UK's recovery.
This Coalition government was formed in the midst of a debt crisis in the Eurozone. Two years later and little has changed. That's the backdrop against which we have to work. So it's only right that we set out our views. We need to be clear about the long-term consequences of any single currency. In Britain, we have had one for centuries. When one part of the country struggles, other parts step forward to help. There is a remorseless logic to it.
A rigid system that locks down each state's monetary flexibility yet limits fiscal transfers between them can only resolve its internal imbalances through painful and prolonged adjustment.
10.47am: Back to the speech. Cameron says legislation on its own will not create growth.
Some people asked why we didn't have more economy Bills in the Queen's Speech. If you could legislate your way to growth, obviously we would. The truth is you can't.
10.45am: But the government needs to do more, he says.
I believe that there is more that we can do. We can use the hard-won credibility of the government's balance sheet to help the economy grow without adding even further to our debt.
Let me tell you what this means.
In many areas we are already using the credibility we have earned to pass on the benefits of low interest rates to businesses and families. We have the credit easing programme for small businesses we have mortgage help for people who want new homes and then there are the guarantees for new infrastructure projects.
I want us to go further, so I've asked the Treasury to examine what more we can do to boost credit for business, housing and infrastructure.
This sounds as if he's announcing an extension of credit easing, but, from the text, it's not immediately clear how significant this is. I'll post more when I get it.
10.43am: Cameron lists some of the things the government is doing to promote growth: short-term measures, like cutting corporation tax, the National Loan Guarantee Scheme and reforming planning; medium-term measures like the Regional Growth Fund and apprenticeships; and long-term measures like High Speed Rail.
10.41am: Cameron accepts the government needs to do more to promote growth.
Fiscal responsibility and monetary activism is the right macroeconomic mix for our over-indebted economy. But the additional ingredient that government will deliver and needs to do even more of is a radical programme of microeconomic reform to make our economy more competitive -including competitive tax rates, planning reform and deregulation.
10.39am: And here's the attack on Labour's proposed economic strategy.
Those who argue we should spend more want us to borrow more, driving up our deficit and our debt and putting our hard-won credibility and low interest rates at risk.
Higher interest rates would mean higher mortgages, lower employment and even more of the money people work so hard for wasted paying the interest on our national debt. We must not and will not let this happen.
10.38am: Cameron says the government still spends £120m a day on interest on Britain's debt and that the government is doing what it can to bring the deficit down.
A central promise of this government - and one of the key tasks that brought the Coalition together - was to deal with this deficit. That is the only path to prosperity.
And that is exactly what we are doing. Despite headwinds from the Eurozone, we are on track. It is a long-term project. It is painstaking work. But the tough decisions we have taken on deficit reduction really are beginning to yield real results. And there can be no deviation from this.
10.32am: Cameron says today's General Motors investment at the Vauxhall plant at Ellesmere Port (see 9.35am) is a vote of confidence in the British car industry.
Look across the country, at Honda in Swindon, Jaguar Land Rover in the West Midlands, Toyota in Derby and Nissan in Sunderland. Britain's car industry is growing.
Indeed, this week our balance of trade in cars turned positive in the first quarter – for the first time since 1976 when Jim Callaghan went to the IMF. And it's not just our car industry which is strong. Life sciences, pharmaceuticals, information technology, aerospace, the creative industries, services. Britain has a stronger base from which to grow.
10.26am: Sky and BBC News have not deemed Cameron's speech important enough to give it the live treatment. But colleagues are tweeting from Manchester, and I've got a text in front of me, so the blogging carries on. I'm reporting using the text issued by Number 10 this morning, not from what I can hear Cameron saying. It's not an ideal arrangement, but it's unusual for the prime minsiter to depart from his text and this seems better than not reporting the speech at all.
Cameron says the government has cut the deficit by a quarter already.
Since we took office two years ago, we have cut the deficit by more than a quarter.
Yesterday, we had encouraging news on unemployment, too. The number of people in work – up by 100,000 in the last quarter. And the number of new business start-ups last year was one of the highest in our history. So now more than ever this is the time to stand firm.
It is important not to squander the progress made, he says.
Yes, we are doing everything we can to return this country to strong, stable economic growth. But no, we will not do that by returning to the something for nothing economics that got us into this mess.
We cannot blow the budget on more spending and more debt.
10.22am: David Cameron is starting his speech in Manchester.
We are living in perilous economic times. Turn on the TV news and you see the return of a crisis that never really went away. Greece on the brink; the survival of the Euro in question. Faced with this, I have a clear task: to keep Britain safe. Not to take the easy course - but the right course. Not to dodge responsibility for dealing with a debt crisis - but to lead our country through this to better times.
My message today is that it can be done. We are well on the way in this journey.
10.14am: David Cameron is about to deliver his speech in Manchester on the economy and the euro crisis.
Here's Patrick Wintour's story previewing what he's going to say.
10.09am: You can read all today's Guardian politics stories here. And all the politics stories filed yesterday, including some in today's paper, are here.
As for the rest of the papers, here are some articles and stories that are particularly interesting.
• Peter Oborne in the Daily Telegraph says Britain should be helping the Greeks to leave the euro.
Something strange has happened. Mr Cameron and Mr Osborne appear to have swallowed the official European line that unthinkable disaster will ensue when the euro collapses. And, of course, it will be messy when Greece exits the euro. But the truth is that the single currency has been calamitous for the peripheral countries of Europe, and will get more calamitous the longer they stay in. Now is the time for them to walk away. And here Britain's traditional role should be to provide help and support – for instance, by offering some of the most brilliant City minds to help the Greeks negotiate an elegant exit and plot a solvent future. Instead, the Chancellor is siding with Greece's tormentors.
• David Aaronovitch in the Times (paywall) says there are too many lawyers in parliament.
Whether the issue is drugs policy or the introduction of phonics into schools, we don't apply the methods that we could to help us to make better decisions. Rather, we rely on selective evidence, persuasion, rhetoric and crossing our fingers and hoping like hell. So why is that? One reason may be that scientists don't get to be decision makers and lawyers do. Of 650 MPs there are 158 from business, 90 former political advisers, 86 lawyers and 38 journalists. Just one MP worked as a research scientist and two have science PhDs. In the US Senate there are no former research scientists, but 38 per cent of senators are lawyers. In President Sarkozy's first 16-strong, cabinet, 9 members were lawyers or had law degrees.
I love lawyers. I love their intellect ... But lawyers are not, in the way that scientists are, truth seekers. When lawyers test the evidence, they do so not to get as close to the truth as they can, but to make an argument or to decide whether a law has been broken or upheld. And now, in this era of judicial inquiries and extended judge-power, much of our governance seems to be a series of turf wars between lawyers in politics and lawyers in law.
It's good that there is something of a resurgence of interest in science, of which the sceptics movement is a part. Perhaps we will see a day when — as the writer Alexandra Robbins put it, the geeks shall inherit the earth and a Martin Rees, a Colin Blakemore and a Lesley Yellowlees can sit at a Cabinet table presided over by Stella Creasy (Labour, PhD in social psychology), or Therese Coffey (Conservative, PhD in chemistry) or even Julian Huppert (Liberal Democrat, PhD in Biological Chemistry). And, if the evidence points in that direction, they might even let a lawyer or two in to join them.
Mr Duncan Smith, the work and pensions secretary, is keen on looking at ways to encourage part-time workers to make the move into full-time employment, among other measures likely to be part of a spending review some time in the next three years. But a person close to the minister described the £25bn figure on Wednesday as "nonsense", saying there was no room left for such steep cuts.
The work and pensions department is already planning to save £18bn a year in benefit payments by 2014-15 by implementing measures such as a cap on housing benefit and less money for disabled people.
The person said: "We have already cut £18bn from the welfare bill. How does he imagine we can cut another £25bn? This is utter nonsense, the figure is ludicrous."
[Steve Hilton] is the man whose calls for a further 90 per cent cut in Civil Service numbers have been hitting the headlines. One of his justifications is that we once ran an empire with only 4,000 civil servants – so how can we justify a Civil Service of 434,000 today just to run Britain? It's a fun argument. It is also absurd.
It is true that under the Raj we ran India and her 400 million people with fewer than 1,500 civil servants. Yet so disproportionate are the numbers that they should have raised questions – even with Mr Hilton. As the historian Niall Ferguson asks in his brilliant book Empire: How Britain Made the Modern World: "Was this the most efficient bureaucracy in history? Was a single British civil servant really able to run the lives of up to three million Indians, spread over 17,000 square miles, as some district officers were supposed to do?"
The answer, of course, was no. As Mr Ferguson explains, beneath the tiny top layer of overwhelmingly British officials was another, much larger bureaucracy composed of Indians who carried out day-to-day administration. And below them, says Mr Ferguson, "was a veritable army of lesser public employees… Without this auxiliary force of civil servants who were native born, the 'heaven-born' would have been impotent."
Funnily enough, the senior Civil Service in Britain today comprises just over 3,700 people. The other 430,300 are the front-line troops who run Jobcentres, tax offices, pensions, prisons and myriad other services. Small wonder that Mr Hilton, who has never run a large organisation, was given short shrift by the head of the Civil Service, Sir Bob Kerslake. After a stormy meeting, Sir Bob, who used to run Sheffield, told Mr Hilton that the idea of a further 90 per cent cut in numbers was "nonsense".
Ministers are considering proposals for a "complete deregulation" of salaries to give schools more power to curb pay rises for the worst teachers, it was revealed.
The Coalition said sweeping reforms were needed because rewards are currently being given to the "great majority of teachers" – creating little incentive for staff to improve.
It could lead to schools in England paying some qualified teachers at a "significantly reduced" rate, the Government admitted. Average classroom teachers currently receive £34,700 a year.
9.48am: For the record, here are the YouGov GB polling figures from last night.
Labour: 45% (up 2 points from Tuesday night)
Conservatives: 31% (down 1)
Lib Dems: 9% (up 1)
Ukip: 8% (down 1)
Labour lead: 14 points
Government approval: -37
It's the second time this week Labour have had a 14-point lead in a YouGov poll. That's the biggest lead YouGov have recorded for Labour since the polling firm was founded in 2002.
9.35am: It's not all bad news today. Following a vote by workers at the Vauxhall plant at Ellesmere Port in favour of new working conditions, the firm is going to confirm an investment that will secure 2,100 jobs.
9.28am: David Cameron has released extracts from his speech in advance. And Ed Balls (pictured), the shadow chancellor, has released his rebuttal in advance too. Here's an extract.
David Cameron is totally out of touch and deeply complacent if he thinks Britain is on the right course. His failed policies have pushed us into recession and the government is now set to borrow an extra £150 billion to pay for this economic failure.
Plan A has failed in Britain, but it is also now failing across the eurozone. David Cameron must recognise the austerity policies which are failing in Europe are the very same policies that have failed in Britain and which the British government has been urging eurozone countries to stick with ...
Instead of using the eurozone crisis as an excuse for Britain's problems David Cameron must wake up to the fact that our economy has not grown for over a year and a half on his watch. When countries like France and Germany have avoided recession, despite the eurozone's problems, it's clear Britain's double-dip recession was made in Downing Street.
9.13am: There's a lot of comment about the eurozone crisis on the airwaves this morning.
Vince Cable (pictured), the business secretary, said people in Britain should not be panicking.
We need to get the risks in perspective. There clearly are risks to the UK. Greece itself is a small country, it's only 2% of the European economy. The risks arise if the crisis were spread to other weaker, countries in southern Europe, but there is no reason why that should happen. They are in the process of creating firewalls to prevent the financial crisis spreading and we hope that they do.
But as far as the UK is concerned we can't directly influence what is happening in the eurozone because we are not part of it. What we can do is to make sure that the UK is a well-run economy ... I don't think there's any reason whatever why in the UK we should be panicking or taking an excessively negative view.
Lord Lamont, the Conservative former chancellor, said a Greek exit would be "messy" but that that would be better than allowing the crisis to prolong.
If we get a situation that is just going on and on, I think that's worse.
The immediate effects of a Greek departure don't go to this country but they would reach us indirectly. The worst effects are on the banking system, first on the Greek banks, but then on French banks that have lent to Greece, and then British banks that have lent to France, so indirectly we are involved.
But the most damaging thing I think is this corrosive effect on confidence. We hear all the time demands for more growth - growth above all depends on individuals and individuals will only grow their business if there is confidence. This going on and on and on - and it's a very serious crisis - the threat being in the background is profoundly destabilising.
Alistair Darling, the Labour former chancellor, said it would be better if Greece did not leave the euro.
I think it is not in the eurozone's interests to let Greece go. I think it would be cheaper to reach a deal with Greece that actually works because the present one is never going to work.
It is going to be very painful for Greece whatever they do, but there is no easy options here but the risk of Greece going out and spreading to other countries in Europe is too great. Look at it from Germany's point of view. The last thing they want is a break-up of the euro and a return to the Deutschmark. It would price them out of the market.
I've taken some of the quotes from PoliticsHome.
9.00am: "We are living in perilous economic times." That's what David Cameron is going to tell us in a speech in Manchester. It is being billed by Number 10 as a speech on the economy and Cameron will use it to reject Labour's calls for a "Plan B".
We will not do that by returning to the something for nothing economics that got us into this mess. We cannot blow the budget on more spending and more debt. It would squander all the progress we've made in these last two, tough years. It would mean more austerity, for even longer. It would risk our future.
But there will probably be more interest in what he has to say about the eurozone crisis. As the Guardian reports today, it is estimated that a disorderly Greek withdrawal from the eurozone (and no one has worked out how to achieve an orderly withdrawal yet) would cost the eurozone $1trn (that's trillion - 12 noughts). Accordig to the extract sent out by Number 10 in advance, Cameron is going to say the eurozone leaders either have to take decisive steps to protect their currency, or accept that Greece is on its way out.
The eurozone is at a cross-roads. It either has to make-up or it is looking at a potential break-up.
Either Europe has a committed, stable, successful eurozone with an effective firewall, well capitalised and regulated banks, a system of fiscal burden sharing, and supportive monetary policy across the eurozone. Or we are in unchartered territory which carries huge risks for everybody.
As I have consistently said it is in Britain's interest for the eurozone to sort out its problems. But be in no doubt: whichever path is chosen, I am prepared to do whatever is necessary to protect this country and secure our economy and financial system.
I'll be covering the speech in detail, and all the reaction to it. There will also be further coverage of the eurozone crisis on our eurozone crisis live blog.
Here are the other items in the diary for today.
9.20am: Universities UK holds a briefing on the impact of the government's immigration policies on universities.
10am: Mark Harper, the constitutional affairs minister, gives evidence to the Commons political and constitutional reform committee about the registation of lobbyists.
10am: Sir Harold Evans, the former Sunday Times editor, and Peter Oborne, the Daily Telegraph columnist, give evidence to the Leveson inquiry.
10.15am: David Cameron will deliver his speech on the economy in Manchester.
As usual, I'll be covering all the breaking political news, as well as looking at the papers and bringing you the best politics from the web. I'll post a lunchtime summary at around 1pm and another in the afternoon.
If you want to follow me on Twitter, I'm on @AndrewSparrow.
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