Debt Crisis: Ministers gather in Brussels to thrash out bank supervision deal 15.10 French finance minister Pierre Moscovici has softened his earlier stance that all 6,000 or so European banks should be supervised by the ECB. He accepted the policy that only banks which hold more than €30bn in assets should come under direct supervision. 15.02 Here's a live stream of the EU finance minister's debate from the council website: 14.50 Vice president of the ECB Vítor Constâncio has broadly supported Mr Shiarly's draft compromise, but has urged that the proposal for direct supervision of banks which operate in three or more eurozone countries be abolished. He said such banks could still be very small and including them would increase the supervisory burden on the ECB, which "does not have an army of supervisors who can supervise all those banks." Vice President of the ECB, Vítor Constâncio 14.39 The Cypriot finance minister Vassos Shiarly, chair of the meeting, is describing the draft compromise proposal, which includes an option that gives more leverage to member states which decide not to participate in the monetary union. He also proposed that only those banks which hold more than €30bn in assets, or assets worth more than a fifth of the home country's economy, or those which operate in three or more eurozone countries should be directly supervised by the ECB. He also proposed a new rule that the ECB should in any case directly supervise at least two credit institutions in each member state. Cypriot finance minister Vassos Shiarly 14.21 The meeting of EU finance ministers has just begun, with the announcement that the presidency has revised the proposals in the hope of finding a middle ground. 14.19 You can watch EU finance ministers arrive and give their views on the prospects for today's meeting here. The Swedish finance minister Anders Borg said an agreement on banking union - which Sweden would not join - would be a "sad day for Europe." It would mean that we would be more divided after this day than before... There is a move now towards eurobanks, eurotaxes, euro transfers, euro commission. We think (those are) steps in the wrong direction. It might be very popular among the eurocrats, but I think there are very few Europeans actually wanting these developments. Swedish finance minister (L) with George Osborne 13.27 EU finance ministers are poised to thrash out a deal on ECB supervision of eurozone banks. We've been getting mixed messages from politicians in the run-up to this meeting, the third gathering of its kind in two weeks. Angela Merkel played down the likelihood of the meeting ending in an agreement while her finance minister Wolfgang Schauble said he was "optimistic" about reaching an accord. Mr Schauble wants the ECB to supervise only the largest banks, while Mr Moscovici backs a single supervisory mechanism for all 6,000 banks in Europe. Sweden's finance minister Anders Borg said yesterday he sould support a banking union provided voting rights are distributed fairly to non-eurozone countries, a view shared by Chancellor George Osborne. Italy's economy minister Vittorio Grilli said it would be "very dangerous" to have separate rules for smaller lenders in a European banking union, speaking to a parliamentary commission. German finance minister Wolfgang Schauble (L) clashed with his French counterpart Pierre Moscovici at last week's meeting 12.56 Director of think tank Open Europe Mats Persson has written a blog post for the Telegraph on why the eurozone wouldn't allow the UK to join an EU banking union. If the eurozone ever achieves a joint backstop for its banks, Helsinki (Stubb's hood), Berlin and even Paris will almost certainly not want Britain anywhere near it. Generally speaking, the bigger the banking sector, the more a country could "benefit" from a safety-net, and the City is the biggest of them all, by far. In other words, the UK could end up a "net beneficiary" in a banking crisis. In a hypothetical scenario, the UK may actually like that, but I doubt Angela Merkel is looking forward to explaining to her taxpayers that not only do they have to underwrite Greece, Portugal and others but also €10.2 trillion worth of UK banking assets - four times the size of the German economy. It ain't gonna happen. 12.26 Eurozone insiders are indicating the Greek bond buyback programme is likely to lead to it receiving its next tranche of bail out cash of around €44bn. A spokesman from the German finance ministry said their information suggests the bond buyback programme went well, while a French minister told news agency AFP the prospects look good for the eurozone to release Greek aid. 12.13 Last night we closed the blog on news the Greek bond buyback plan exceeded its target but still managed to miss its debt reduction goal due to the higher than expected cost of buying bonds back from investors. The programme attracted bids amounting to €31.9bn, exceeding the €30bn target, but because the purchase cost more than expected, the plan is set to reduce debt to 126.5pc of GDP by 2020, short of the IMF-imposed target of 124pc. Athens plans to buy up all the bonds it was offered at 33.8pc of face value, meaning it needs a further €1.29bn from international lenders in addition to the €10bn already pledged. Meanwhile, we await the decision of the IMF and ECB on the next tranche of bail out cash, which came with the condition Greece would reduce debt to 124pc of GDP by 2020. According to Bloomberg, we will hear the outcome tomorrow. 11.36 The chief economist at the Institute of Directors Graeme Leach has responded to this morning's upbeat UK employment figures with a somewhat sobering analysis. The puzzle intensifies. Employment is shooting for the stars whilst the economy crawls along the floor. Employment is up by 0.5 million year-on-year whilst the economic outlook looks more L- than V-shaped. Whilst the growth in employment is positive we shouldn't forget that real earnings growth is negative, with inflation rising faster than pay. So one festive cheer but not two. 11.13 Turning back to Italian politics, it looks like Silvio Berlusconi's leadership bid could be under threat. His former coalition partners the Northern League, whose collaboration is considered vital for the centre-right to block the centre-left Democratic Party from forming a stable government, said they would not play ball if the former PM returned to power. Roberto Maroni, the head of the Northern League wrote an open letter to Mr Berlusconi in Italian daily newspaper La Repubblica saying: Dear Silvio, we can't agree to it if you're in the field. The League cannot support you if you keep up your candidacy for prime minister. Roberto Maroni, head of the regionalist party Northern League 10.37 More talk ahead of today's meeting of EU finance ministers, and it seems the Germans are eager to reach an agreement today. A German official told Reuters the country's finance minister Wolfgang Schauble, who last week came to blows with his French counterpart Pierre Moscovici, had told the cabinet he was "optimistic about a deal." Ministers are meeting at 1.30pm London time today to thrash out the details of a single supervisory mechanism by the ECB. The official said: We hope for major progress and perhaps a breakthrough [in the talks]. We are ready to contribute to a solution on banking supervision. We have some questions but if they can be resolved by finance ministers today then Germany will not stand in the way of an agreement. 10.30 Last week we reported that manufacturing activity fell in Germany, France and Italy in October. Now figures from across the 17-nation euro area show the pinch across the whole bloc, with factory output continuing to fall in October after a 2.3pc drop in September. The decline undoes the two months of modest growth over the summer. Ralph Solveen, an economist at Commerzbank, wrote to clients: Domestic demand will only turn around when uncertainty among the companies about the fate of the euro has been dispelled, prompting them to increase investment again. 10.22 Some welcome news for the chancellor as he prepares to do battle in Brussels - latest ONS figures have shown a surprise drop in the number of people claiming unemployment benefits in November. Claimant numbers fell 3,000, compared with analysts forecasts that the figure would rise by 7,000. Another survey showed the number of people in work rose to 29.6m - the highest since records began in 1971. 10.03 Later today Chancellor George Osborne will head to Brussels where EU finance ministers are resuming discussion on the ECB's single supervisory mechanism for banks after a meeting last week ended in deadlock. Cracks appeared around the reach of the ECB - whether it should directly supervise all 6,000 euro area banks, or just the major ones, an issue which saw French finance minister Pierre Moscovici and his German counterpart Wolfgang Schauble come to blows. Osborne goes with concerns of his own over whether closer monetary union in the eurozone will leave non-euro nations out in the cold with weakened voting rights. 09.41 The Italian government has decreed for a further €3.9bn in state aid to its third biggest bank Monte dei Pashi di Siena. The figure includes an extra €500m requested in November by the bank, which had its credit rating downgraded to junk status by Moody's weeks earlier. The decree comes into force immediately but must still receive approval from parliament within 60 days. Monte dei Pashi di Siena was founded in 1472 as a lender to the poor 09.29 Looking ahead to Thursday and Friday's gathering of the heads of government from the 27-nation bloc tomorrow's EU Council meeting, the EU Council has created a 'tag cloud' showing the topics EU leaders have discussed since the first European Council in 1975. Unsurprisingly 'economic' features strongly, though conversation appears to be dominated by pillow talk on relations and affairs.