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Tue Jan 24, 2012, 12:28 PM

Eurozone crisis live: Greek creditors defiant after EU ministers reject deal

http://www.guardian.co.uk/business/2012/jan/24/eurozone-debt-crisis-greece-bond-deal

Professor Simon Evenett from the University of St. Gallen, Switzerland has compiled some thoughts on Davos, which starts tomorrow.

Leaving aside what is said for show, behind closed doors expect discussions at Davos to focus on three key aspects of the eurozone crisis. First, expect banks to collectively warn Germany and France against inflicting too many losses on holders of Greek government debt. Second, expect the same banks to lobby any government that will listen to go slow on raising capital requirements and other regulations that jeopardise a return to the go-go years. Third, expect the rest of the world to tell eurozone governments that no more IMF money will be forthcoming without many strings attached.

While the eurozone will dominate discussions, don't be surprised if the Americans and their European allies use Davos to further marginalise Iran. The consequences of being tough on Iran may well generate the biggest geopolitical surprise of the year.

Live blog - market down

4.43pm: Quick markets update -- the FTSE 100 closed at 5751, down 30 points or 0.5%.

Chris Beauchamp, market analyst at IG Index, commented that "frustration with the lack of progress on Greece finally begins to make itself felt." We're still some way from a serious sell-off, though.

4.11pm: An update on the situation in Italy -- it now appears that Fitch has been officially added to the list of rating agencies who are being investigated by the country's police.

We mentioned at 12.02pm. Reuters is now reporting that the probe has been extended to cover Fitch, as well as S&P and Moody's. The reason? Fitch's suggestion this month month that it could downgrade Italy by two notches.

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