Under EU draft proposals seen by the pink 'un, eurozone countries would be required to to sign binding contracts with Brussels, in another step towards fiscal union that would increase the bloc's control over national economic policies. More from Alex Barker and Peter Spiegel: The provision, included in a report distributed to EU countries before this month's summit, would require all 17 eurozone members to sign on to the kinds of Brussels-approved policy programmes and timelines now negotiated only with bailout countries. If adopted, the plan could help to meet demands in Germany for tighter control over the economies of highly indebted countries such as Italy and France that have a mixed record on economic reform. The proposals reflect how far some EU leaders believe they need to overhaul the eurozone with more centralised decision-making. It is a shift that many policy makers conclude will require a wholesale change in EU treaties. 10.09 Eurozone retail sales ticked up in August, according to official data. The 0.1pc monthly rise was largely driven by "food, drinks and tobacco," Eurostat said. Non-food sales fell 0.7pc. Across the EU, sales fell 0.1pc. The highest increases were registered in Luxembourg (+2.9pc), Portugal (+2.8pc), Slovenia (+2.2pc) and Spain (+2.1pc), and the largest decreases in Poland (-1.3pc), Denmark (-1.1pc), France and Lithuania (both -0.8pc). Shoppers in Spain, where retail sales rose 2.2pc in August (Photo: Alamy) 09.53 Spain's economy minister has outlined more details of the "bad bank" it plans to set up to take on the country's toxic property assets. Luis de Guindos told parliament this morning that private investors would hold a majority stake in the vehicle (at least 55pc), with equity (equal to 10pc of the value of the bad bank's assets) to come from the Fondo de reestructuración ordenada bancaria - or FROB - or bank buffer fund. The full details will be published within days, Mr de Guindos added. Spain's economy minister Luis de Guindos (Photo: AP). 09.40 In Britain, the Markit/CIPS services PMI fell to 52.2 in September, from 53.7 in August. Markit said that "anecdotal evidence suggested an underlying improvement in demand and a post-Olympics boost to business activity." However, the boost is likely to be minimal, as Chris Williamson at Markit explains: The September service sector PMI adds to evidence to suggest that the UK economy barely expanded in the third quarter. GDP is likely to have grown by perhaps 0.1% as modest growth of services activity was offset by a slight drop in construction sector output and a steeper decline in manufacturing, according to the PMIs. 09.25 Commenting on the data, Howard Archer at IHS Global Insight, said: The deeper contraction in Eurozone services activity in September reported by the purchasing managers is very disappointing and worrying, and reinforces belief that the Eurozone suffered further GDP contraction in the third quarter (we anticipate a drop of 0.3-0.4% quarter-on-quarter). This would put the Eurozone in recession in all senses of the word and the prospects for a return to growth in the fourth quarter currently look far from bright given still markedly contracting incoming mew business. Not only did the survey show Eurozone services activity contracting at the fastest rate for 38 months in September but other elements of the survey were well in contraction territory and generally weaker, which does not bode well for Eurozone services activity in the near term at least. 09.21 Markit's eurozone composite PMI (which includes services data) fell to 46.1 in September, from 46.3 in August. Ireland remained the only country to report an increase in overall activity, with its rate of growth hitting a near one-and-a-half year high of 53.0 in September. Chris Williamson, Chief Economist at Markit said: The final Eurozone PMI came in slightly higher than the flash estimate but still signalled one of the steepest monthly downturns seen over the past three years. It seems inevitable that the region will have fallen back into recession in the third quarter. After falling by 0.2% in the second quarter, a steeper fall in output is likely for the third quarter. Prospects do not look good due to cost cutting and rising redundancies. Although there were some signs of stabilisation in Germany, any hopes for optimism that the current downturn has bottomed out are tempered by news of steepening rates of contraction in France and Spain, and an ongoing severe downturn in Italy. 09.12 Europe's two largest economies are also struggling. In Germany, the PMI rose to 49.7, from August's reading of 48.3. However, a flash estimate at the end of September had suggested the sector was back in growth territory (50.6). Markit said that there were signs of "fragile business sentiment across the service economy" in Germany last month. In France, the PMI fell to 45, from 49.2 in August, as the rate of job cuts accelerated to the sharpest for 33 months. Jack Kennedy, senior economist at Markit, said: The French service sector sank further into contraction in September, mirroring the trend in manufacturing. The weak PMI data suggest it is highly unlikely that French GDP will have avoided slipping into decline in Q3. The disappointing news on business activity was accompanied by an accelerated rate of job cutting, which points to further labour market weakening following last week's news that unemployment has risen above three million. A woman waits in an agency of Pole Emploi, France's national employment agency (Photo: AFP). 09.01 In Italy, the Markit/ADACI services PMI ticked up to 44.5 in September, from 44 in August. Markit also said this: With workloads down further on the month and efforts to reduce costs continuing, Italian service providers shed staff again during September. Moreover, the rate of decline in employment accelerated to the fastest since the series record in June 2009. 08.52 Lots of data out this morning. After Monday's dismal manufacturing data, today's news on services isn't much better. Markit's Spain services PMI fell to 40.2 in September, from 44 in August. This is well below the 50 level that divides growth from contraction, and represents the sharpest fall since November 2011. Markit said that job cuts continued for a 55th - yes, 55th, straight month. The hotels and restaurants sector was the only sector that took on extra staff in September, Markit said. Commenting on the data, Andrew Harker, economist at Markit, said: The deterioration in the Spanish service sector intensified in September, with PMI data pointing to the sharpest drop in activity for almost a year. The rise in VAT added another hurdle for companies as they were less able to offer the sort of discounts required to support new business intakes. Taken alongside the manufacturing PMI data, the latest survey suggests that Spanish GDP looks set to have fallen for yet another quarter in Q3, with little prospect of improvement apparent in the near future. Passengers and taxis are seen outside the entrance to Barcelona Sants railway station. The hotels and restaurants sector was the only one to take on extra staff in September, according to markit survey data (Photo: Bloomberg).