From left to right: Christine Lagarde, French Minister for Economic Affairs, Didier Reynders, Belgian Deputy Prime Minister and Minister for Finance and Institutional Reforms and Herman Van Rompuy, President of the European Council, at the Eurogroup meeting in Brussels, March 15, 2010.

Eurozone finance ministers on Monday agreed to support an aid plan for Greece that will not include loan guarantees.

The ministers from the 16 member countries of the currency area confirmed that a rescue would be available if needed after welcoming Greece's €4.8 billion austerity plan including in tax increases and wage cuts, which was announced earlier this month.

Economic View; Eurozone finally offers the carrot to Greece: Goodbody chief economist, Dermot O’Leary, comments - - "EU finance officials look to have played a pretty smart game over the past month or so. When Greece was crying out for support, other Eurozone members were reluctant to immediately come to the rescue and instead decided to engage in some carrot and stick treatment. This had a role in Greece announcing further austerity measures to reduce its budget deficit over recent weeks. True to their word, Eurozone finance ministers last night look to have provided the carrot by agreeing on measures to support countries in trouble in a bid to avoid any possible crisis in the Eurozone.

While the detail of any agreement is still unclear at this stage, the head of Ecofin, Jean-Claude Juncker ruled out loan guarantees, but stated that “We have been very clear that Greece won’t be isolated or left alone. If the emergency came up concerning Greece, Greece will be helped by the Eurozone”. It looks likely that this support will come in the form of bilateral aid from a pool of resources of the Eurozone countries, although Juncker stressed that he doesn’t think any support will be necessary. Indeed, it shouldn’t reduce the need for countries to get their own house in order, as the supposed backing that Greece has received from the EU has come at a great cost to its economy and its people. Given that Ireland has received praise from many quarters for its willingness to engage with fiscal consolidation over the past twelve months, it also needs not rest on its laurels and continue on with the plan that has been set out. For now though, the hysteria in the Eurozone looks to have abated."

US industrial production recovers slowly: Davy analyst Barry Dixon, comments - - "US industrial production rose by an anaemic 0.1% in February as poor weather impacted manufacturing output. The figure implies a year-on-year increase of 1.7%, up from the -5.0% rate in November last year. Manufacturing output declined by 0.2% in the month, driven mainly by a 4.4% decrease in auto production. Business equipment increased by 0.4%, while consumer goods declined by 2.3% (the latter falling from the 2.7% increase recorded in January). Significantly, capacity utilisation increased to 72.7% from 72.5% in January. The reading still remains well below the 80% level associated with inflationary pressure, suggesting that monetary tightening is still some way off in the US.

It looks therefore that governments may have to continue to support economic growth through accommodative fiscal policies for some time. This is true particularly in the US and UK, both of which have important elections this year. With the possibility of hung parliaments in both outcomes, this fiscal largesse could continue for longer than expected. In the US in particular, as the impact of ARRA peaks in 2010, the question arises as to what governments will do if the consumer or business investment fails to recover in time to replace public spending. The possibility of a second stimulus to protect jobs, particularly in employment-intensive areas such as infrastructure, becomes a real possibility.

All of this is positive for economic growth and should provide decent support for continued earnings growth."

Discussing the shorting of the subprime mortgage market, the Goldman bubble, and more, with Michael Lewis, author of "Liar's Poker" and former Wall Street bond salesman:

British Airways: British Airways today published contingency plans to allow 60% of customers to keep flying through trade union Unite's strike period of March 20, 21 and 22.

The schedule aims to fly around 45,000 customers each day on March 20, 21 and 22. This represents around 60% of customers originally booked to fly on these days. In addition, many thousands more customers will be offered seats on alternative British Airways flights or on services operated by other airlines.

BA said at this stage the vast majority of flights between March 23 and March 31 remain in the schedule and the airline said it is is still available to hold further talks but wants customers to have early warning of its flying schedule to allow sufficient time for alternative travel arrangements to be made.

In the first strike period, the airline will operate all longhaul flights to and from Gatwick and more than half of shorthaul flights at the airport. All flights to and from London City airport will be unaffected by the strike action.

At Heathrow the airline will continue to operate more than 60% of its longhaul flights to and from the airport during the first three days of action.

The airline will operate some of its own shorthaul flights at Heathrow, and will supplement its schedule by leasing up to 22 aircraft with pilots and crews from eight different airlines based in the UK and Europe. This will enable the airline to operate around 30% of its shorthaul schedule.

British Airways has also agreed with 40 other carriers that customers can be rebooked free of charge during the actual strike period onto their flights if they had been due to travel on a BA flight which has been cancelled.  

Willie Walsh on video

The Fed rate setting FOMC meeting this week may take investors by surprise by revealing plans to claw back liquidity measures, Michael Gallagher from IDEAglobal told CNBC Monday. Chris Watling, CEO of Longview Economics, joined the discussion:

US markets

On Monday, the Dow Jones rose 17 points or 0.16% to 10,642.

The S&P 500 inched up 0.055 and the Nasdaq dipped 0.23%.

Asia

The MSCI Asia Pacific Index rose 0.2% Tuesday on speculation that the Bank of Japan may expand a fund that provides loans to banks to increase credit.

The Nikkei 225 dipped 0.28%; the Shanghai Composite added 0.53%; Australia’s S&P/ASX 200 Index gained 0.27% and India's Sensex Index climbed 1.33%.

Asia benchmarks

Finfacts Reports

Eurozone finance ministers agree on how support package for Greece would be provided if the need quickly arises

Real price of Amsterdam house only doubled in more than 350 years

St. Patrick's Day March 17, 2010 - - tribute to the man who drove some of the snakes from Ireland!; The Spanish origins of the Irish

European car sales rose in February despite a post-scrappage scheme plunge in Germany

Lehman ousted whistleblower in 2008 who had raised red flags with Big 4 accounting firm Ernst & Young on $50bn scam; Box-ticking auditors in frame

Markets News Afternoon: US industrial production was flat in February; China held $889bn in Treasury securities in January - - Ireland held $$39bn

Moody's says US and the UK are moving closer to losing their AAA credit ratings as the cost of servicing their debt rises

Employment in the Eurozone fell a record 2.7 million in 2009; One in three unemployed persons in the EU27 have been jobless for over a year

In Europe, the Dow Jones Stoxx 600 has risen 0.78% Tuesday.

The ISEQ has added 0.73% in Dublin.

AIB is up 3.56% and Grafton has climbed 4.07%.

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