Picture: AP 10.42 More from that pow-wow between the French and German finance ministers this morning. Pierre Moscovici of France has said that Germany needs to be flexible and respect Europe's diversity and not just focus on rules and discipline. "We have to beware of all caricatures" because they create ambiguous situations, he told students in Berlin. It is true that Germany is very attached traditionally to rules and discipline, which are things we need - but at the sime time we have to be capable of flexibility, of understanding and of respecting our diversity. Reuters reports that with Mr Schaeuble sitting beside him, he said that the German finance minister "would perhaps not have spontaneously advised me to get an extension" to the French deficit goals, but that the German minister had expressed his understanding. 10.33 Ben Martin adds that European bourses are reaching fresh highs this morning: The gains seen in the mining sector have helped pull the FTSE 100 to a fresh five-year high today, having touched 6,547 in mid-morning trade. In Germany, the Dax, which reached record levels on Friday, has also climbed 0.7pc to a new all-time high. 10.15 On the markets, Ben Martin reports: Analysts at heavyweight broker Goldman Sachs have cast their eye over newly merged commodities giant Glencore Xstrata and have a cautious message for investors this morning. Staring their coverage of the group with a "neutral" rating, the broker's experts said: Given Goldman Sachs" commodity price forecasts, particularly for copper, thermal and met coal, we believe that debt levels will need to be lowered before shareholder returns can be lifted to differentiated levels versus peers. Glencore has the most potential to increase returns of peers on our estimates, but debt will likely need to be managed first. Still, Glencore's shares are up 1.9pc with the wider mining sector. Meanwhile, HSBC continues to climb in the wake of its well-received first-quarter update and is up 3pc, the second-biggest gainer on the FTSE 100. 10.11 Back with that meeting between Pierre Moscovici and Wolfgang Schaeuble (mentioned at 09.41), the German finance minister has said that Europe will get its banking union underway swiftly. Mr Schaeuble said Europe would get the union underway on the basis of current European treaties instead of waiting for treaty changes. "It's a priority project," he said, adding: "We must make the best of it on the basis of the current treaties." 10.03 Also on the agenda this morning is a "high-level conference" to discuss a "blueprint" for a "deep and genuine" European monetary union. Jose Manuel Barroso, president of the European Commission, is giving the main address while Olli Rehn and Jeroen Dijsselbloem are also there (watch here). The Telegraph's Bruno Waterfield is there. He tweets: 09.55 Pierre Moscovici's comments about the pace of economic reform come after he said this weekend that the "dogma of austerity" is coming to an end. He told Europe 1 radio on Saturday that "we're witnessing the end of the dogma of austerity" as the only tool to fight the debt crisis. "We've been pleading for a growth policy for a year," he added. Austerity on its own impedes growth. France has been offered a two-year extension to meet EU deficit rules. However, German politicians are not too impressed by this delay. A spokesman for the Christian Democractic Union said earlier this month that France must show it's willing to tackle structural reforms. Mr Moscovici has perhaps gone some way to assuaging those concerns this morning, assuring an audience in Germany that France will continue its efforts to tackle the structural deficit and will not use the extra time as an incentive to relax the pace of reform. 09.41 One of the more interesting events in Europe today is a chinwag between French finance minister Pierre Moscovici (pictured below) and his German counterpart, Wolfgang Schaeuble. The European Commission has given France - which this morning revealed a slump in manufacturing activity - more time to get its deficit below the limit of 3pc of GDP. But Mr Moscovici said this morning that this does not mean France will slow down its economic reforms. He said on a visit to Berlin today: The flexibility accorded to us is not treated by us... as an incentive to relax the pace (of fiscal consolidation). We will continue our efforts to tackle the structural deficit. France is a serious country conducting a credible policy, we do not renounce this (fiscal responsibility). He added that fixing public finances should not choke off growth: Of course, we have to make sure public finances are put right, but you have to carry out this exercise carefully, taking into account the natoinal situations and defining the right rhythm for preserving growth prospects. 09.28 HSBC has been helped by a fall in bad debts and costs. Losses from bad debts plunged by 51pc to $1.2bn and costs fell 10pc in the first quarter from a year ago, giving a fillip to Stuart Gulliver's drive to streamline operations, reduce complexity and cut businesses that are unprofitable or lack scale. 09.24 HSBC's shares have risen 2.4pc this morning. Pre-tax profits have come in slightly higher than analysts' expectations of $8.04bn. 09.20 HSBC has just published its results for the first quarter of the year. Pre-tax profits stand at $8.4bn (£5.4bn) compared to $4.3bn during the same quarter last year. Stuart Gulliver, HSBC chief executive, said: While continuing uncertainty in the global economy has created a relatively muted environment for revenue growth, we have increased revenue in key areas including residential mortgages and Commercial Banking in both our home markets of Hong Kong and the UK, and in our Financing and Equity Capital Markets business. We have achieved further progress on the journey we started in 2011 to make HSBC easier to manage and control. The implementation of global standards will help ensure that we meet the commitments we made to the US and UK authorities as part of the settlement agreements reached at the end of last year. Our performance in April continued the trend we saw in the first quarter. Looking at the macroeconomic environment, there are still challenges ahead. However, we expect the mainland Chinese economy to accelerate after a slower than expected start to the year; the US to continue to outperform its peers, although the pace of growth is slow compared to past standards; the eurozone to contract; emerging markets to grow at around 5% and global growth to be around 2% for 2013. 09.12 Britain's latest car sales figures are out. Sales accelerated last month, according to figures from the Society of Motor Manufacturers and Traders. There were a total of 163,357 new registrations in April 2013 - a 14.8pc rise on the April 2012 figure. The April 2013 increase was the 14th successive monthly rise. 09.08 Ben Martin reports that European bourses are lethargic this morning: The FTSE 100 has made little headway this morning, having risen just eight points, or just 0.1pc, although the picture is much the same in Europe. The Cac 40 in France is flat, while Germany's Dax and the Ibex in Spain are both up 0.1pc. 09.04 As we reported at 07.07, Lord Lawson, the former Chancellor, has said that David Cameron must lead Britain out of the EU. Deputy prime minister, Nick Clegg, has responded to those comments. He told ITV's Daybreak: I think that if we were to leave the European Union we'd jeopardise up to three million jobs in this country that are dependent on our place in the world's largest border-less single market. We'd make ourselves less safe, because we work in the European Union, to go after criminals who cross borders. It would be more difficult to deal with environmental challenges which cross borders. We wouldn't be taken as seriously by the Americans who like the fact that we stand tall in our own European back yard. 08.51 The Guardian is this morning running an interview with the Nobel prize-winning economist Paul Krugman (pictured below), who is publishing a second edition of his book End This Depression Now. As The Guardian points out, Mr Krugman now has 1m followers on Twitter, with his tweets - and blog - becoming a focal point for the crusade against the argument that austerity can foster a recovery. The newspaper writes: For such a sophisticated thinker, Krugman's solution - which upsets some liberal supporters - is straightforward. Asked if he is concerned a splurge of borrowing will trigger a repeat of the financial bubbles that caused the crash and spur inflation as too much money chases too few goods, he is dismissive. "As far as planting the seeds of the next crisis, bear in mind that leverage is still falling, so I don't see the problem at this point," he says. In Krugman's view, concerns about ageing populations, looming health costs, the changing nature of the workforce in a digital age and competition from Asian economies for jobs, are for another time. Should we be having more spending? The answer must be yes. Because there is plenty of slack in the labour market and investment needs to increase. To me it is clear that there is plenty of room to increase spending without increasing inflation. What many people fail to see is that macro economics moves much more slowly than they think. You can read academic papers from the 1930s and after you strip out the arcane academic language, they could be written today. 08.34 Ben Martin reports: Volatile mining shares, which have a heavy weighting in the FTSE 100, are helping the blue-chip index edge higher this morning, with Glencore Xstrata up 2.2pc, BHP Billiton 2.1pc higher, and Rio Tinto rising 1.9pc. That has lifted the benchmark index seven points in early trade, with investor sentiment bolstered by news of further economic stimulus in Australia, where the central bank announced a rate cut overnight. 08.33 Twitter is not impressed by the 0.9pc fall in French industrial production, mentioned at 07.59: 08.13 Trading in London is off to a fairly muted start after the long Bank Holiday weekend, with the benchmark FTSE 100 up less than a point at 6,522 and the mid-cap FTSE 250 edging 10 points higher. Ian Williams, strategist at City stockbroker Peel Hunt, says the gains seen at the end of last week, following the encouraging US jobs data, may be hard to follow: History shows that gains are tough to maintain at this time of year and the bottom-up earnings news is struggling to support the move in valuations. The mid and small caps especially are still enduring regular profit disappointments. The most eye-catching blue-chip mover is security group is security group G4S, which has tumbled 12pc in early deals in the wake of a disappointing trading update (07.43). 08.12 Before we get some reaction to those French industry statistics, let's take a look at some action Down Under. Australia's central bank has today cut rates to a record low as it tries to temper the effects of a stubbornly high dollar. The Reserve Bank of Australia eased rates by a quarter point to 2.75pc, taking rates below the nadir touched in the global financial crisis. But even after today's easing, Australian rates remain among the highest in the developed world. Scott Haslem, chief economist at UBS, said the RBA appeared to have "simply grown weary of a high Aussie, while becoming more comfortable about the high pace of domestic inflation." "This suggests even with our outlook for better growth, the cash rate in Australia is likely to remain low for longer than has normally been the case," he added. 08.01 A little more detail on those French figures. Manufacturing of transport equipment fell 2.4pc and making of food and drink dropped 2.1pc, but manufacturing of coke and refined petroleum products jumped 7.9pc. 07.59 Those French figures are now out. Statistics from Insee show that in March, France's manufacturing output dropped 1pc month on month while industrial production as a whole fell 0.9pc. 07.52 Let's have a look at what is on the agenda for today. This morning, we're expecting French manufacturing and industry data; and at midday, German factory order statistics are due. Christine Lagarde, head of the International Monetary Fund, is in Holland today. There, she will meet Jeroen Dijsselbloem, Dutch finance minister and head of the euro group. 07.43 G4S, the support services business which hit the headlines last year when it failed to provide enough security workers for the London Olympics, has updated on trading. The FTSE 100 business says that margins this year could be lower than expected after a difficult first quarter in Europe. G4S noted that the group margin was down around 0.6pc in the first three months of the year due to "challenging economic and trading conditions in Continental Europe" and other factors such as ongoing pricing pressure in the UK. But, G4S did say that its organic growth was good despite the challenging conditions and flagged up a particularly strong performance from its American division. 07.32 On the markets, Tokyo stocks have soared to their highest level in almost five years, with the market driven higher by a weakening yen. The Nikkei closed up 3.55pc at 14,180.24 - its best finish since June 2008. Japan's bourse has accelerated since late last year as Tokyo pledged to boost the country's economy with a policy of large-scale spending and aggressive central bank easing, which has helped push down the value of the yen. That, in turn, tends to lift the local stock market as it makes exporters more competitive overseas. 07.22 In other corporate news, supermarket giant Sainsbury's has confirmed that it is in advanced negotiations with Lloyds Banking Group to take full ownership of Sainsbury's Bank. Graham Ruddick reported over the weekend that the retailer was in talks with Lloyds to take full control of its banking joint venture. 07.15 As Robert Peston of the BBC points out, Paul Walsh has had a particularly long run at the helm of Diageo: 07.11 Now for a look at this morning's corporate news. Top of the agenda is that Paul Walsh is stepping down as chief executive of drinks giant, Diageo. Mr Walsh is to retire from the company on 30 June 2014 and over the next year, he will focus on handing over critical relationships to his successor, Ivan Menezes. Mr Menezes is currently chief operating officer at Diageo. Franz Humer, chairman of Diageo - whose brands include Johnnie Walker whisky, said: Paul is an outstanding Chief Executive. He has served our business, its shareholders, employees and partners with enormous imagination and dedication over the past 13 years. I know he is justly proud of Diageo and its people and he leaves a great legacy for his successor. The Board is immensely grateful for his ambitious and thoughtful stewardship of the business and its people. The transition process which has been put in place enables Paul to contribute his knowledge and experience during Ivan's first year as Chief Executive Officer. We are delighted to have a leader of Ivan's talents and global experience to succeed Paul. The handover is being made at a time when the business is strong and Ivan takes on the role of CEO at an exciting stage of the company's global development. The Board is confident that Ivan will inspire our organisation and Diageo will continue to achieve our medium-term performance objectives. 07.07 Also in the Telegraph today, Christopher Hope reports that Lord Lawson of Blaby, the former Tory Chancellor, has said that David Cameron must lead Britain out of the European Union. He writes: The peer, who was Margaret Thatcher's most successful chancellor, said the EU has become a "bureaucratic monstrosity" and that the benefits of leaving "would substantially outweigh the costs." Lord Lawson said it was pointless to try to improve terms on Britain's EU membership ahead of a an in/out referendum in 2017 and that Mr Cameron has to resign himself to four years of "inconsequential" negotiation with his EU partners. Lord Blaby - who voted for Britain to join the EU in 1975 - said he would be backing Britain's exit in 2017. The Daily Telegraph understands that China's sovereign wealth fund will not be able to invest in long-term British projects until a solution to the diplomatic stand-off, caused by David Cameron's meeting with the Dalai Lama last year, has been reached. 07.05 And The Telegraph's business pages lead with news that billions of pounds of investments in major UK infrastructure projects are at risk because of a rift in relations with the Chinese government. James Quinn and Malcolm Moore report: The Beijing government believes Britain needs to make amends before relations can return to normal. "Any good business relationship relies on a good political relationship for the long-term," sources said. Favourable political conditions would help with that. Generally speaking, China is very willing to participate in infrastructure projects. But to invest, there needs to be a strong relationship. 07.00 Now for a look at this morning's business pages: The Financial Times (£) leads with Microsoft preparing to U-turn over key elements of its Windows 8 operating system, which the FT calls one of "the most prominent admissions of failure for a new mass market consumer product since Coca-Cola's New Coke fiasco nearly 30 years ago." The Guardian leads with news that data for April could show a contraction in Germany's business activity, with prospects for the service sector looking 'increasingly gloomy'. The Independent's business front page claims that women are still finding it hard to smash glass ceiling. The average chief executive of a leading British company remains a 53-year-old male with a background in finance, according to the annual Robert Half CEO tracker, says the Indy.