Waiting for the summit

Cyprus became the fifth euro zone country to seek a bailout last night though its needs – maybe up to 10 billion euros – will not put a dent in the currency bloc’s resources. We’re still waiting to see precisely how much money Spain will take for its banks of the 100 billion euros offered. Moody’s cut the ratings of 28 of 33 Spanish banks by one to four notches last night, an inevitable consequence of the sovereign downgrade earlier this month.

Markets seems to have decided that they will be disappointed by the crunch summit at the end of the week. There was a somewhat discordant meeting between the big four euro zone leaders on Friday, with Germany’s Merkel refusing to budge in key areas, but she and French President Francois Hollande have the chance to strike a more positive note when they meet bilaterally on Wednesday abnd hot off the press we have a meeting of the finance ministers of Germany, France, Italy and Spain this evening — so maybe there is a concerted effort to get on the same page.

Lael Brainard, the U.S. Treasury guru who liaises with Europe, spoke for the rest of the world when she told us in an interview that EU leaders had to put “more flesh on the bone” of their ideas to resolve the crisis.

The intention for the summit is to set out a road map to economic and banking union. EU officials hope the latter can be done in a year, though Germany is only happy to consider vital aspects such as a deposit guarantee structure once the path to fiscal union is set in stone. That requires treaty change and will take a lot longer. And even if a banking union was in place this time next year, it would not resolve the immediate crisis.

A strong signal of intent at the summit might settle the markets, not least because it could be crucial in persuading the ECB to hold the fort if needed, although its levers are not problem-free. A widely expected interest rate cut probably may not make much difference, its three-year money splurge bought three months of time last time, maybe less if it does it again, and would reinforce the “doom loop” of weak banks and sovereigns leaning on each other for support. Reviving the bond-buying programme faces stiff internal opposition and, since the ECB is now viewed as a preferred creditor having avoided a writedown as part of the second Greek bailout, it could drive private investors out if it came in. ECB hardliner Weidmann was out last night saying the central bank had reached the limits of its mandate but in extremis it would surely act again as that would be precisely in line with its mandate to maintain financial stability.

Live from Muscat

Watch below for live blogging from Muscat for the GCC policymakers’ meeting. Just place your cursor on the page (you don’t have to click) and wait for the count down.

GCC Oman meeting

Live Blogging G20

Finance ministers from the G20 are meeting in London on Friday and Saturday to discuss the next steps in battling the world’s worst economic and financial crisis since the Great Depression.

Reuters correspondents from around the world will be at the event, taking you behind the scenes and and providing unprecedented coverage through this live blog.

G20 Finance Ministers Meeting in London

Power shifts from G7 to G20

Finance chiefs from the G20 meeting in London on Friday and Saturday are likely to be in a slightly better — or at least more relieved — mood than they were last time they got together.

The world economy is still in a mess and the financial system is far from running normally. But — and it is a big but at that — fears of global economic collapse have dissipated. This is in no small part as a result of the actions of groups such as the G20 which endorsed coordinated intervention into the marketplace.

So much so, in fact, that much of this weekend’s discussions will touch on the so-called exit strategies that countries will need to get themselves back out of the stumulus and bailout business. With markets in mind, they are likely to be coy about it.