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Pimco is the world's largest bondholder and when its CEO Mohamed El-Erian speaks people tend to listen. Today the Greek newspaper eKathimerini has an interview with El-Erian in which he says the famous 50 percent haircut for Greece's bond holders is not enough.

"According to our analysis, 50 percent is not enough for Greece to restore credibly the conditions for medium-term debt sustainability and economic growth. A 50 percent haircut would still leave open way too many questions about Greece’s economic and financial outlook," the CEO told the paper.

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Italian prime minister calls for German help

Mario Monti urges German government to do more to help lower Italy's borrowing costs
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Mario Monti in Rome yesterday. (STR/AFP/Getty Images)

The new Italian Prime Minister told the Financial Times that it was in Germany's "own enlightened self-interest" to help Italy and the other heavily indebted countries of the euro zone periphery to lower their borrowing costs.

Monti, a technocrat appointed to replace Silvio Berlusconi, praised Germany's "culture of stability" as "a precious German product [that] has been marvelously exported.”

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Euro zone debt crisis: focus returns to Greece

Negotiators head to Athens to try and nail down agreement on bail-out
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The rioting has calmed down in Athens but negotiations on the Greek bail-out aren't going so well. This week is crunch time and depnding on what's decided the streets may catch fire again. (LOUISA GOULIAMAKI/AFP/Getty Images)

You may have thought the Greek crisis was pretty much over. After all the headlines from last November were: Greek bondholders agree to take a haircut and the country's Prime Minister George Papandreou resigns to be replaced by a technocrat named Lucas Papademos, who is more congenial to the needs of the EU's leadership in Brussels, and more important, to German Chancellor Angela Merkel.

But as focus shifted to Italy and now to France, the Greek situation has remained bogged down in details. This week Greece's creditors in banks and hedge funds (not necessarily interested in the same outcome) plus representatives of the "Troika" (EU, IMF and European Central Bank) descend on Athens for an intensive round of negotiations with the Greek government.

Larry Elliott at The Guardian has the best line of the day on the event. "It is international finance's version of Sartre's Huis Clos, a vision of hell where three people who loathe each other are stuck in a room for eternity."

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Euro zone crisis: has a corner been turned?

The atmosphere is calmer these days - politically and in the bond markets. Why?
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Was Silvio Berlusconi's departure the turning point for the euro zone debt crisis? (ANNE-CHRISTINE POUJOULAT/AFP/Getty Images)

There is probably no riskier form of behavior for a blogging journalist than to claim that a corner has been turned in solving the euro zone's debt crisis but two weeks into the New Year it feels like something has changed - and changed for the better.

It may be a moment akin to something in an episode of ER where the patient is in the emergency room and the crash carts have been deployed and vital signs have stabilized and the family - you and me and everybody in the world who understands that a euro crash will mean Great Depression MkII - are taking a deep breath, sipping tepid coffee, and feeling tentatively hopeful that the patient will make it.

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Europe: Daily economic round-up

Draghi speaks, bonds sell, euro rises, markets calm
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Mario Draghi at his monthly press conference today. His words were like balm on troubled financial market waters (DANIEL ROLAND/AFP/Getty Images)

ECB chief Mario Draghi held his monthly news conference today and re-iterated he is not changing anything. Interest rates on ECB lending would remain at 1 percent. The bank plans to make further three year loans available for euro zone retail banks starting next month.

The first tranche of three year loans was made available just before Christmas. Almost half a trillion euros was borrowed by around 500 banks. Since then almost as much money has been deposited every night at the ECB leading critics to say the banks were borrowing the money but not getting it out in to the general economy by lending to businesses or buying euro zone nations' sovereign debt.

Draghi told the press conference that the program was working.

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2012: old economic story, new wrinkle

European Central Bank is lending money cheap to banks, and the banks are parking it back with the ECB
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The European Central Bank can't seem to give money away. They loan it to Europe's retail banks and then the banks deposit it back with the ECB. (FRANK RUMPENHORST/AFP/Getty Images)

Shortly before Christmas the European Central Bank made three-year loans available to Europe's retail banks at extremely low interest rates in the hopes of boosting their liquidity.

What the banks did with the money they borrowed was up to them - although the hope was they would buy lots of their nations' sovereign debt and thus drive down interest rates on these bonds.

Instead it seems they are taking the money they borrowed and parking it back at the ECB.

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A Xmas spy story

New biography reveals truth about Britain's top double-agent during WW II
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There's always room on British bookshelves for another story about how the Brits outwitted Hitler (-/AFP/Getty Images)
New biography reveals truth about Britain's top double-agent during WW II
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Mario Draghi's plan begins to take shape

European Central Bank President makes low interest loans available to Europe's retail banks and guess what? they snap the cheap money up.
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You can't always get what you want but if you try sometimes Mario Draghi will give you what he thinks you need: in this case, cheap loans to the euro zone's cash strapped banks. (DANIEL ROLAND/AFP/Getty Images)
European Central Bank President makes low interest loans available to Europe's retail banks and guess what? they snap the cheap money up.
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Euro and "morbid speculation"

Christmas spirit distinctly absent as first step in euro zone rescue fails to unite EU members
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ECB president Mario Draghi doesn't seem overly worried about "morbid" speculators outside the euro zone (code for anti-euro folks in London and New York) at a meeting yesterday in Brussels. (JOHN THYS/AFP/Getty Images)
Christmas spirit distinctly absent as first step in euro zone rescue fails to unite EU members
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The thoughts of President Mario

European Central Bank president Mario Draghi tells European Parliament euro is strong and permanent
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ECB President Mario Draghi appearing before Members of the European Parliament today in Brussels (JOHN THYS/AFP/Getty Images)
European Central Bank president Mario Draghi tells European Parliament euro is strong and permanent
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