Debt crisis: as it happened, October 4 2012 Mr Ostwald points out that with nothing of major substance in Mr Draghi's comments, the focus now turns to the meeting of Francois Hollande, Mario Monti and Mariano Rajoy tomorrow. Indeed. And on that note, we will leave the blog there for today. Thanks very much for reading and commenting. 16.52 On the markets, London's FTSE 100 has finished the day virtually unchanged. It is up just 1.97 points at 5827. France's CAC is off 4.8 points to 3401 while Spain's Ibex is down 13.9 points to 7812. 16.21 At 15.24, we mentioned the US factory order figures, which experienced their worst fall since January 2009 in August. Richard Blacken, the Telegraph's US Business Editor, points out that the figures should not necessarily be taken at face value: As America digests an impressive performance by Republican challenger Mitt Romney in last night's first presidential debate, there was more bad news for President Barack Obama. US factory orders saw their worst decline in more than three years in August, falling 5.2pc. It is important to note that the bulk of it was explained by a steep fall in orders for commercial aircraft. Once that is stripped out, they actually rose 0.7pc. It is not much of a silver lining for Obama, though, as it suggests third-quarter growth will not offer much improvement on the second. 16.07 Wolfgang Schaeuble, Germany's finance minister, has taken aim at Greece this afternoon. He said that with the exception of Greece, all countries in the eurozone hit by the debt crisis have made good way on economic reforms: All of the countries which are in a programme, except Greece, which is in a particularly difficult situation... have made remarkable progress. Even though they are not in a programme, what Spain and Italy have achieved is grand. He added that countries that make necessary efforts on reforms can be given "more time" to repair their public finances. Greece has asked for more time to fix their public finances; but Germany and other countries have responded coolly so far. 15.54 Spain's central bank chief has undercut the government's proposed 2013 budget, saying it was based on over-rosy forecasts for economic growth and tax revenue. Luis Maria Linde, the newly-appointed governor, delivered a blunt message to prime minister Mariano Rajoy, saying: This outlook ... is certainly optimistic in comparison with the outlook shared by the majority of international organisations and analysts. Reuters reports that Linde said the government, which has already raised taxes and cut tens of billions of euros in costs, should consider further steps this year to meet next year's deficit target of 4.5pc of gross domestic product agreed with the European Union. 15.24 Not good news for President Barack Obama as the US election heats up. US commerce department data out this afternoon shows that demand for American factory goods in August fell by the most since January 2009. New orders for manufactured goods tumbled 5.2pc. 15.09 The euro has ticked steadily higher against the dollar, helped by Mario Draghi pledging to preserve the currency. It's trading around $1.2985. 14.48 If you didn't find Mario Draghi's press conference particularly scintillating, you're not the only one. The man himself was apparently caught describing it as 'boring'. 14.41 Mario Draghi has now finished his press briefing. Here are some of the main points: On whether Spain can resolve its crisis without aid: The decision (to apply for aid) is entirely in the hands of governments. The ECB has done what was possible and the OMT would create an environment which is conducive to reforms ... but the initiative is in the hands of governments. On whether Spain is doing enough to receive ECB help: There is a tendency to identify conditionality with harsh conditions ... Conditions don't need to be necessarily punitive. Actually many of the conditions have to do with structural reforms, which have both social cost, but also great social benefits. And if they are well-designed, the second are going to be greater than the first ... That is up to the Spanish government to decide and it is up to the other euro area governments to decide whether the programmes - whether - you know the conditions, you know that it is necessary to make a request to an EFSF/ESM programme. We would actively seek the IMF involvement in the process. On conditions for the OMT: OMTs will not take place while a given programme is under review and would resume after the review period once programme compliance has been assured. OMTs ... have helped to alleviate such tensions (in financial markets) over the past few weeks, thereby reducing concerns about the materialization of destructive scenarios. On whether the ECB considered a rate cut: No 14.24 Draghi says that the ECB is ready, has a fully effective backstop mechanism in place and it's in the hands of governments now. He added that the ECB does not have a target or rage of targets for bond yields on the OMT. 14.06 Mr Draghi points out that the OMT is only available to countries with incomplete market access. That prompts Lorcan Roche Kelly to tweet: 14.02 Open Europe is tweeting a few of Draghi's comments from the press conference. They write: 13.59 Mario Draghi says Spain has made significant progress, but challenges remain. He adds it's up to Spain to decide if it wants to apply for aid. 13.48 On Twitter, here's what GFT analyst, Matt Weller, had to say about Draghi urging speedy ratification of the fiscal compact: 13.43 Draghi says that a fast ratification of the fiscal compact would help, adding that crisis countries have made noticeable progress. 13.39 Draghi says he is ready to undertake OMTs - or unleash his bazooka - once prerequisites are in place. The ECB would exit from OMTs, he says, once objectives were fulfilled or if countries failed to comply. 13.34 Mario Draghi has begun his press conference. He says that inflations rates are expected to remain above 2pc throughout this year and that economic growth in the eurozone is expected to remain weak. He adds that decisions on 'outright monetary transactions' - his big bazooka, in other words - have alleviated tensions in recent weeks. 13.24 Following the ECB's interest rate decision, all eyes are now turning to Mario Draghi's press conference. You can watch it live here. 12.51 As expected, the ECB has held interest rates at 0.75pc. 12.42 Both Frankfurter Allgemeine Zeitung and euobserver.com have this tale on how European Union leaders are considering a eurozone budget. Speaking about the possibility of a eurozone budget, one EU official told euobserver.com: There seems to be more impetus behind it, but the most we can expect is for member states to say they are willing to explore it. Euobserver.com continues: French finance minister Pierre Moscovici has already floated the possibility of a eurozone budget being used for unemployment benefits in countries under particular pressure, such as Spain where over a quarter of the workforce is out of a job. But, said the EU source, the budget would rather needed to be 'new money' on top of the common EU budget for 2014-2020 currently being negotiated. Otherwise these negotiations risked being completely derailed. A unanimous decision among all 27 members would be needed to allow for any non-standard use or splitting of the EU budget. Meanwhile, the EU commission is planning to come up with its own blueprint on how eurozone budget could be achieved One idea is to have loan guarantees on the back of the EU budget used for eurozone states only. This could be in the form of what is now the nearly exhausted European Financial Stability Mechanism (EFSM) - a €60 billion fund used for the Irish and Portuguese bailouts. Another idea is to have "own resources" - such as a financial transactions tax - fund this eurozone-only pot. 12.18 Looking ahead to November, Anna Leach, CBI head of economic analysis, thought that the Bank of England's Monetary Policy Committee is likely to favour further asset purchases. She added: While there have been a few positive signs in recent data, underlying conditions remain relatively flat. Meanwhile, uncertainty around the international backdrop is likely to build further through the autumn, keeping confidence in check. 12.05 As Howard Archer, an economist at IHS Global Insight, points out, there was little doubt that the Bank of England would stick to its current QE plans and keep interest rates at 0.5pc: The MPC were always highly likely to sit tight at their October meeting given that the current £50 billion extension to QE will last through to November while the "Funding for Lending Scheme" is still in its early stages and yet to really take effect. Furthermore, pressure for immediate further stimulative action has been eased by the economy recently showing overall signs of modest underlying growth although any recovery still looks feeble and fragile. We believe the odds are still heavily slanted towards more Bank of England stimulus in November, most likely in the form of a further £50 billion of Quantitative Easing which would take the stock up to £425 billion. 12.00 The Bank of England has maintained the interest rate at 0.5pc, as expected. 11.55 The head of Fitch's sovereign ratings team has been speaking to Reuters Insider television. He said that an intensification of Spain's recession poses the biggest risk to the country's investment grade: The biggest threat from our perspective to Spain's investment grade status is actually that the recession there intensifies and that spills into greater concerns about bank asset quality as well as the solvency of the Spanish state. 11.23 Portugal's prime minister has defended his austerity programme, saying the country has to stay the course of austerity or risk wasting the credibility that the bailed-out country has regained. Passos Coelho also said Wednesday's tentative return to bond markets by Portugal via a swap operation (that swapped short for longer-dated debt) showed government policies were working and credible. His comments come after Portugal yesterday announced a raft of new cuts designed to reduce the country's debt load and unveiled sweeping changed that will see the average income tax rate rise by 2pc. 11.02 There are suggestions that Spain's borrowing costs fell at that auction (see 10.06) thanks to expectations the country will eventually ask for a bailout. Nick Stamenkovic, bond strategist at Ria Capital Markets, said: There is a natural demand given the expectation that at some point Spain will request a sovereign bailout and the ECB ... will buy short-dated bonds. The test going forward is going to be the next 10-year auction. Yields on Spain's 10-year bonds are currently ticking higher, rising 6.3 basis points to 5.82pc. 10.39 Cyprus could be next in line for a bailout, according to Bloomberg. The newswire reports that the Cypriot government will seek an €11bn bailout to prop up its banks and pay its bills. The country's banks, which lost more than €4bn in Greece's debt restructuring earlier this year, are said to need €5bn of fresh capital. The 'troika' puts Cypriot banks' recapitalisation needs at about €10bn, according to Bloomberg. 10.30 At France's bond auction, the country sold €7.97 of bonds due between 2018 and 2041. Borrowing costs fell, with yields on bonds due in 2022 decreasing three basis points to 2.17pc. Annalisa Piazza at Newedge Strategy said there was "super strong demand" at the auction. 10.06 Spain's borrowing costs have eased in its latest bond auction, where it comfortably sold just shy of €4bn of three different bonds. The country's treasury sold: