Portugal's finance minister Vitor Gaspar has announced that the country has passed its third financial healthcheck by the "troika" officials from the EU, the ECB and the IMF. This paves the way for the release of its next, €14.6bn tranche of bailout funds. 10.51 Commenting on the auction, Marc Ostwald at Monument Securities said: The cover as ever not overwhelming but on net slightly better than in January, and more importantly the full target volume of EUR 6.25 Bln was achieved. Given that the cover was not really out of line with previous sales, it would be tenuous to argue that tomorrow's 3-yr LTRO gave a boost to the sale. As a general point, the BTP curve remains very steep, and thus offers Italian Banks and Fund Managers very attractive carry; one wonders, when the central bank liquidity "music stops," whether most Govt curves will have to be this steep! Equally Italy and the Eurozone are by no means out of the woods yet, so this is again a battle won in a long ongoing war. 10.45 On the eve of the announcement of the ECB's second long term refinancing operation (LTRO), Italy's long-term borrowing costs have fallen to their lowest levels since August. The country sold €6.25bn of five and ten year bonds in two separate auctions this morning. Yields on 10-year debt fell to 5.5pc from 6.08pc at the last auction in January. There were 1.4 bidders per bond on offer, compared with 1.42 bidders at the last auction. The Treasury also sold new five-year bonds at an average yields of 4.19pc (compared with 5.39pc in January), the lowest since May. The highs and lows of Italy (chart shows yields on 10 year debt from August to February 28). Italy's 10-year borrowing costs rose as high as 7.5pc in November, before easing back (Photo: Bloomberg). 10.35 If you'd like to put your questions on how the markets have been moving recently to Jeremy Batstone-Carr, chief economist at Charles Stanley, then don't forget that you can join the Telegraph's live market webchat today at noon. 10.33 Let's take a closer look at how the FTSE 100 in London has fared this morning. Here's Rachel Cooper with more: Whitbread, owner of Premier Inns and Costa Coffee, was among the worst performers on the benchmark index after it revealed a slowdown in sales growth. Britain's biggest hotel operator said like-for-like sales at Premier Inn fell 0.9pc in the fourth quarter, having been up 2.6pc in the third quarter. But sales at Costa Coffee grew 6.2pc, compared to 3.8pc growth in the previous quarter. Overall, group sales rose 1.8pc, compared to 2.4pc in the third quarter. Although sales had slowed, helping push Whitbread's shares down 1.9pc, Whitbread said it would meet forecasts for full-year profit. 10.15 Eurozone economic confidence has picked up for the second consecutive month, according to a survey by the European Commission. Its economic sentiment indicator (ESI) came in at 94.4 in February, compared with forecasts of 94, according to a Bloomberg poll. The EU-wide figure was 93.9 (against a long-run average of 100). In a statement, the EC said: Among the largest EU Member States Poland reported the biggest increase in sentiment, followed by France, the Netherlands and Italy, while the ESI improved only marginally in the UK and remained broadly unchanged in Germany and Spain. The ESI is above its long-term average only in Germany. 10.02 Germany's highest court has ruled that a nine-member committee set up to approve quick decisions taken by the eurozone's temporary bailout fund was "in large part" unconstitutional. The Federal Constitutional Court said the committee only has a mandate to decide on European Financial Stability Facility (EFSF) purchases of government bonds on the secondary market. For background to today's ruling, take a look at this blog by think-tank Open Europe. 09.52 Former German chancellor Helmut Kohl appeals for a "united Europe" in German newspaper Bild this morning, a day after the paper ran the headline: "Billions for Greeks. STOP!" on its front page. The current debate in Europe and the crisis-ridden situation in Greece may now not cause us to lose the goal of a united Europe from the eyes or even questioned and put back away. The opposite is true: We must use the crisis as an opportunity. We need - right now - more and not less Europe. The front page of yesterday's Bild 09.41 According to AFP, part of the EU summit, which starts on Thursday, has been cancelled. More from the newswire: Leaders of the 17 euro states had been due to discuss boosting their debt defences over lunch on Friday, the second day of an EU summit. However, a senior official told AFP that the session had been cancelled amid uncertainty over Germany's willingness to raise its contribution and after G20 countries delayed a decision on a related IMF funding increase until April. The source said it was unclear early on Tuesday whether the issue would be tackled instead by eurozone finance ministers when they open the two-day Brussels gathering for talks on Greece on Thursday afternoon, or whether the debate would be put back altogether. 09.30 European Commission President José Manuel Barroso has replied to a letter from UK Prime Minister David Cameron and ten other European leaders' calling for the EU's economic policies to become more growth-focused ahead of this week's EU summit in Brussels. We have agreed on an ambitious and comprehensive growth and jobs strategy: Europe 2020. Our common ownership of it needs to be more visible to our citizens. They need to know that the EU has a clear strategy for building a better future and that all Member States are working in the same direction. There should be no artificial separation between EU and national growth policies, they reinforce each other. The crisis is having a severe social impact in some Member States and is causing anxiety right across the EU. As well as taking active measures to boost employment and to help the most vulnerable, we need to provide a sense of direction and hope. Otherwise we will not be able to count on the social acceptability of the important measures that need to be taken. Here is the letter in full (click the link to view a larger version): Letter From President Barroso to David Cameron et al 09.02 Greed is not good. That's the new mantra of actor Michael Douglas, who played ruthless financier Gordon Gekko in the movie Wall Street. Mr Douglas stars in a one minute film as part of an FBI campaign to root out criminal behaviour and prevent securities fraud and insider trading. As Mr Douglas puts it, "If a deal looks too good to be true, it probably is." 08.45 Meanwhile, Ireland, which has become the eurozone's poster child for implementing austerity, was given another gold star yesterday, as the IMF approved its latest €3.2bn (£2.7bn) bailout tranche last night. David Lipton, IMF first deputy managing director, said: The Irish authorities have continued strong implementation of their program despite deteriorating external conditions, meeting 2011 fiscal targets with a margin and advancing structural reforms to support growth and job creation. After three years of contraction, Ireland's growth is estimated at almost 1 percent in 2011, with exports leading the current account into surplus. Ireland's bond spreads have declined significantly in recent months, although they remain relatively high. 08.37 Portugal will present the results of its latest financial health check by the "troika" officials from the EU, the ECB and the IMF later today. The troika is expected to approve Portugal's next tranche of its €78bn bailout agreed last year. Finance Minister Vitor Gaspar is expected to hold a news conference at 11am UK time to present the findings. 08.30 A quick look at the markets. The FTSE 100 in London opened up 0.16pc at 5,925.18, while the CAC 40 in Paris was up 0.2pc at 3,448.56 and Frankfurt's DAX 30 rose 0.24pc to 6,886.38. 08.25 Dozens of police have also moved in to clear protesters' tents from the steps of St Paul's Cathedral in London. Follow live coverage of the eviction here. Protesters at the Occupy camp at St Pauls Cathedral are evicted (Photo: PA) 08.17 Here are some of the other business stories making the headlines today: Banks, bank bonuses, and banker salaries are all on the front page this morning. Top of the list? Barclays, and its use of two "highly-abusive" schemes to avoid paying tax. 08.11 Yesterday also saw German politicians approve the €130bn Greek bail-out. However, the Bundestag remained unconvinced by Angela Merkel's warning that abandoning Greece would be "incalculable and therefore irresponsible." The Bundestag voted through the rescue funds with a large majority. But Ms Merkel was shown tough political and public opposition to any more support, just a day after the G20 demanded German backing for the eurozone firewalls. Standard & Poor's said it had put the European Financial Stability Facility (EFSF), the "big bazooka" tasked with raising the bail-out funds, on negative outlook. The rating agency said the fund's profile was weaker since some of its guarantor countries were stripped of their AAA ratings. Angela Merkel, Germany's chancellor, casts her vote on the Greek bailout fund, in the lower-house of the German Parliament in Berlin, Germany, on Monday (Photo: Bloomberg). 07.59 Banks will hope to use the combination of emergency liquidity assistance offered by central banks and these "EFSF buybacks" (the eurozone's interim bailout fund) outlined below to sidestep any funding issues. Rival ratings agency Fitch has already said it will likely follow S&P and downgrade Greece to "restricted default" (oh, semantics) once the debt-swap has been completed. Both agencies will reassess Greece's rating once the new, longer dated bonds have been issued. 07.40 In fact, the ECB has just issued this statement: The Governing Council of the European Central Bank (ECB) has decided to temporarily suspend the eligibility of marketable debt instruments issued or fully guaranteed by the Hellenic Republic for use as collateral in Eurosystem monetary policy operations. This decision takes into account the rating of the Hellenic Republic as a result of the launch of the private sector involvement offer. At the same time, the Governing Council decided that the liquidity needs of affected Eurosystem counterparties can be satisfied by the relevant national central banks, in line with relevant Eurosystem arrangements (emergency liquidity assistance). Marketable debt instruments issued or fully guaranteed by the Hellenic Republic will become in principle eligible upon activation of the collateral enhancement scheme agreed by the Heads of State or Government of the euro area on 21 July 2011, and confirmed on 26 October 2011, together with a number of other measures aimed at assisting Greece in its adjustment programme. This is expected to take place by mid-March 2012. 07.38 Under normal circumstances, if a country is classified as in "default" by the ratings agencies, this poses questions over whether the European Central Bank (ECB) can accept Greek bonds as collateral in order to loan money back to banks. This in turn raises funding concerns for the banks. 07.34 While Jean-Claude Juncker, President of the Eurogroup, said: This or possible similar rating decisions by credit rating agencies have been duly anticipated and taken into account in the planning of the PSI operation. More specifically, following the Eurogroup meeting of 20 February 2012, euro area Member States are in the process of carrying out the relevant national procedures that allow i.a. the provision by the EFSF of a buy back scheme (collateral enhancement) allowing for the eligibility of marketable instruments issued or guaranteed by the Greek Government for use as collateral in Eurosystem monetary policy operations for the period of the SD ratings. I look forward to a high participation of private creditors in the PSI operation and takes note of S&P's intention to upgrade the lower ratings following the settlement of the bond exchange. 07.32 The downgrade prompted the Greek finance ministry to issue this statement: This move was pre-announced and all its consequences have been anticipated, planned for and addressed by the relevant decision of the European Council and the Eurogroup. The downgrade has no impact in the Greek banking sector as its liquidity effect has been addressed by the Bank of Greece, and consequently by the EFSF. 07.17 Those ratings agencies do enjoy their late night downgrades. Last night Standard & Poor's (S&P) cut Greece to "SD," meaning that it believes the country has undergone a selective default. The agency cited Greece's retroactive insertion of collective-action clauses (CACs) to its debt as the reason for the move. In a statement, S&P said: