Davos 2012: as it happened, January 25, 2012 The International Monetary Fund (IMF), headed by Christine Lagarde, is pushing for an increase in the eurozone rescue fund as talks between Greece and its private creditors stall. However, Mrs Merkel disagreed with Ms Lagarde in her speech. "We have said right from the start that we want to stand up for the euro, but what we don't want is a situation where we are forced to promise something that we will not be able to fulfil," she said. 18.00 Louise Armitstead has filed on that Mandelson / Lyons row mentioned at 16.12. She reports: Gerard Lyons, chief economist for Standard Chartered Bank, warned that the euro is "fundamentally flawed and cannot survive" in comments that triggered an extraordinary public rebuttal from Lord Mandelson. In a hard-hitting speech at the Davos 2012 World Economic Forum, the economist said that Europe's politicians had been "playing to the gallery" rather than tackling the fundamental problems of the crisis. "Europe has been driven by politics and the economics are now unwinding," he said. He added: "EMU stands for "even more unemployment."" 17.40 Assistant editor Jeremy Warner has been tweeting from Davos. What he's hearing suggests the financiers there aren't quite filled with optimism about efforts to hold the eurozone together: 17.20 Hang on. Angela Merkel has been replaced by the entertainment, the Davos live feed shows. It's very upbeat, perhaps a counterpart to all that economic gloom. 17.04 Economist Gerard Lyons, of Standard Chartered bank, comments: 16.52 Now it's time for a Merkel Q&A, and reaction to her speech is coming in. 16.47 Merkel says she knows Europe is labelled the world's big economic "headache" but says let's be honest - it's not the only one. Disappointingly for the assembled press, she doesn't ruffle feathers by naming names. 16.45 Addressing what needs to be done, Merkel says "we have to be ready to transfer more competencies to Europe .. the [previous] stability and growth pact was not kept ... [it] was watered down. She sees the fundamental point of the fiscal compact they are trying to introduce as setting a constitutional, legal cap on countries' debt. The European Court of Justice will monitor this when it's done. 16.40 Talking about some countries that have 40pc youth unemployment - hello, Spain - Merkel says it's no surprise that some young people are not convinced that Europe is for them. 16.35 Now for the "but." Merkel says: There is a clear lack of the political structures of the necessary underpinnings to make this project work... Do we dare more Europe? ... She says they are ready to "dare more Europe" in three areas: budgetary discipline, competitiveness - linked to that also, jobs - and, thirdly, solidarity. 16.30 And Angela Merkel, the German Chancellor, is up, talking about - you guessed it - Europe: The financial and economic crisis that started in America left a deep imprint on Europe and we are still working on the fallout from this. Europe was a work of peace ... and we cannot overestimate what a success this was, after a century of wars tore us apart. We are lucky to be able to be with others and share our common future. 16.18 Meanwhile Paul Polman, chief executive of Unilever, has attacked final salary pension schemes - which he claimed were damaging the economy. City Editor Richard Fletcher reports: "We have to look at the fact people retire with 50, 60 or 70pc of final salary," Mr Polman said. 16.12 As we wait for Chancellor Merkel to make her appearance, Kamal Ahmed has the details of an entertaining spat between a top economist and Lord Mandelson. Very un-Davos, it seems: Verbal punch-ups are fairly rare at Davos. Indeed, for the Big Suits here in the snow the problem is that everyone tends to agree wholeheartedly on the public platforms before going away and having a vociferous row over a glass of gluhwein. Lord Mandelson, former EU trade minister and onetime Prince of Darkness under Labour, decided to break with Davos Rules at lunchtime, launching a spirited attack on Gerard Lyons, the chief economist at Standard Chartered. Lyons had the temerity to suggest that the euro was so fundamentally flawed it "cannot survive." In piece of theatre straight from the Art of Politics, Chapter 1, Page 1, Lord Mandelson attacked Lyons for something he hadn't quite said. "Gerard, you clearly have no wish or will to see the eurozone survive," he said. He added for good measure that it would be a cold day in hell before eurozone leaders began taking advice from a bunch of bankers. Lord Mandelson knows that, as chief economist, Lyons has about as much to do with the financial meltdown as I do. But, no matter, Lord Mandelson got the banker-bash in and spoke to Gerard as a disappointed father might a recalcitrant teenager. Willing the euro to collapse would bring calamity, a fall in living standards and countless other disasters. Better would be a "laser like focus" on fixing the damn thing. Shame on you Gerry! Lyons gently pointed out that he was merely outlining the economic facts and at no stage had said he wanted the euro to collapse. But, Lord Mandelson had grabbed everyone's attention and the argument was made. The fact that he is launching a report on globalisation here tomorrow would, obviously, have nothing to do with his sudden plunge into the limelight today. 16.05 Louise adds: I bumped into Sir Roger Carr, chairman of Centrica and Director General of the CBI. Just a few hours after his arrival he agreed that Europe was the "main issue for Davos." He said he wasn't holding out for a solution but said he hoped there would be movement " towards what we really need - for leaders to agree a way forward, quickly, and then stick to it." The half-agreements and then withdrawals are "damaging for all of us" he said. Sir Roger will be around all week, we'll keep you posted with his comments. 15.56 The Telegraph's Louise Armitstead is among those waiting for the day's big draw, the German Chancellor. 15.44 A Reuters blog called Confessions of a Davos spouse makes for juicy reading. Anya Schiffrin, a writer and academic who is married to the economist Joseph Stiglitz, reveals that "a lot of untoward groping goes on after hours." She explains: Davos encourages bad behavior. It comes from the hot-house atmosphere of high-powered egos, the high altitudes combined with too much drink. All sorts of people who would never stay up late can be found - cocktail in hand - at the Google party, the Time Warner reception, and the gala dinner on Saturday night. It's usually too loud to have a conversation but they try. There are always a lot of men who become "geographically single" when they arrive, and even the nerdiest expert in anti-malarial bed nets or obscure financial instruments fancies himself a player the moment he steps foot in the Zurich airport. Late at night, these men can be found eyeing the local talent, and there are rumors of at least one baby being born nine months after a night of passion at Davos. Lest you be thinking of hotfooting it out there next year, be warned. Anya adds: Last year one businessman held forth about his travails in Russia and kept the crowd entertained with a lengthy description of how he lost his company to the tax authorities. That passes for a gripping evening at Davos. 15.39 They say a picture paints a thousands words. So we've compiled a slideshow of photos emerging from this year's Davos. 15.30 Richard also has more on those cashmere freebies mentioned at 13.05: Quick update on the cashmere scarves. In Davos it's all about status - and the colour of the badge. Only white badge holders apparently got the scarves. 15.18 An update from our City Editor Richard Fletcher: Our team in Davos was worried that you might think it was all glamorous parties, canapés and bumping into the great and the good. So here is a picture of the rather crowded and surprisingly hot media centre where they spend much of their time. We back in the office are reassured. 15.00 Kamal Ahmed, Sunday Telegraph Business Editor, has been taking a look at the annual PwC Risks report, launched in Davos. And it's rather alarming reading. 14.55 Economics correspondent Angela Monaghan has caught up with Lord Mandelson, the former Business Secretary and European Trade Commissioner, as he does the Davos rounds. He had this to say about this morning's surprise 0.2pc contraction in UK GDP: The growth figures are very disappointing, and they will worry all of us who want to see the economy turn round, investment to get going, and businesses to start growing again and generating employment. I think we will have to wait for the next quarter figures before we can determine whether or not we're facing a further recession. I hope very much that we are not but this underlines even more the need for Europe to collectively look at stronger growth policies alongside the need in some cases for fiscal deficits to be reduced and austerity policies to be fuller. Everyone is waking up to the risk of austerity contagion and I think that you"ll see a more nuanced approach during the coming year, including from the British Government. I think Plan A has already been adapted because it's being implemented over a longer period of time, we've had to take on more debt in order to finance the social and unemployment costs of continuing recession. Nobody wants to see that continue but to head it off we need a different mix of policies across Europe and not just within single countries. 14.37 French oil major Total has stopped buying oil from Iran in line with new EU sanctions introduced on Monday, chief executive Christophe de Margerie has said at Davos. But he's not a fan of the political decision: I think [Iran's] oil will go somewhere else... Iran may give a discount to make it easier and quicker but nothing will change. 14.30 Word to the wise. With so much going on, we have decided to run two live blogs for the next few days, separating out our coverage of the eurozone debt crisis and Davos 2012. We are covering Davos in more detail here, but it's still business as usual for our live eurozone blog (just in case you thought that had all blown over). 14.25 Our reporter Louise Armitstead, in Davos, warns that nearly one in four company bosses have admitted to being badly prepared and ill-equipped to push into the emerging markets - and that their focus is too narrow.