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Eurozone Crisis Live Blog: Headlines Turn Negative, Markets Wait For ECB

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Worse Greek economic numbers and concerns over the legality of the summit plan are likely to keep markets on tenterhooks
Worse Greek economic numbers and concerns over the legality of the summit plan are likely to keep markets on tenterhooks

The International Monetary Fund (IMF) gave a bleak forecast for Greek growth on Tuesday, adding more miserable economic news to markets already overburdened with concerns. The country's recession should see its economy shrink a full 6% next year, the IMF said.

Last week's figures for deposits at the European Central Bank (ECB) show that banks are increasingly holding cash at the institution, and taking advantage of its emergency lending facility - a sign that fear over future shocks has led to a nascent credit crunch.

Stocks saw large swings across the day, with the French CAC-40 and the German DAX ending down 0.35% and 0.19%, respectively, although volumes were low, suggesting that investors are keeping their powder dry until they get more clarity on how - or whether - the shorter term elements of the eurozone crisis plan will be implemented.

The euro, despite its resilience over the past year, fell to an 11-month low.

As they have been for months, investors' eyes are fixed on the ECB, which is due to meet on Thursday. Any indication that the institution's president, Mario Draghi, has changed its position and stands ready to print money and ease the building shortage of credit in the eurozone would more than likely drive a big rally.

Headlines on Wednesday morning that non-eurozone signatories to Friday's treaty are concerned over gaps in the plan, and over the legalities of its implementation, are unlikely to calm the markets in the meantime.

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