Eurozone crisis live: Markets anxious ahead of GDP data The deadline for Greece's debt swap is looming. Photograph: Walter Geiersperger/Corbis 9.09am: Spain appears to have overtaken Italy in the line of eurozone countries at most risk. The yield on Spanish 10-year bonds is back above 5% this morning (5.04% as I type), while the Italian equivalent is still around 4.96%. Although it's a small difference, that indicates that Spain is being treated as a slightly greater risk. As my colleague Ian Traynor reported last night, Spain is now on a collision course with Brussels after PM Mariano Rajoy set a new deficit target of 5.8%, rather than the 4.4% previously agreed. City analysts are warning that European leaders risk fracturing the currency union if they take too hard a line on Spain. Elisabeth Afseth of Investec, for example, argues: It may well be a sensible decision to go a little easy on the fiscal contraction when Spanish unemployment is running at 23%, but it does question the effectiveness of the recently agreed fiscal compact and what degree of fiscal discipline can be imposed without fuller integration. If the euro area is not ready for more integration then it may well be headed for a break-up. 8.54am: Fears over the European economy sent stock markets falling in early trading this morning. The FTSE 100 lost 36 points, or 0.6%, to 5847, with most other markets posting similar falls. The German DAX is the worst performer, though, down over 1%. Traders seem to have refocused their attention on the European economy's underlying weakness (rather than the twists and turns in the debt crisis). Yesterday's disappointing service sector data, for example, reinforced fears that the eurozone economy is shrinking. Koen De Leus, strategist at KBC Securities in Brussels, explained that: Latest macroeconomic figures from the euro zone, especially at a time when the ECB's major liquidity operations are over, have raised concerns of a recession and disappointed markets. The euro has fallen in early trading too, hitting a low of $1.317. 8.41am: Quite a light day on the agenda. The updated eurozone GDP is the main economic event, and there are a couple of interesting bond auctions to watch: Eurozone Gross Domestic Product for Q4 2011 - 10am GMT / 11am CET • Eurozone Household Consumption for Q4 2011 - 10am GMT / 11am CET • Eurozone government expenditure for Q4 2011 - 10am GMT / 11am CET • European Financial Stability Facility bill auction - 11am GMT Denmark, the Netherlands, Hungary and (possibly) Greece are all selling debt this morning, with America holding a sale of 4-week and 52-week Treasury bills this afternoon. 8.30am: Good morning, and welcome to our rolling coverage of the eurozone debt crisis. Coming up: how badly is the eurozone economy faring? Updated GDP data due this morning will have the answer. Last month's initial reading showed a contraction of 0.3% - putting the region half-way into a new recession. With Greece's debt swap deal dragging on, there are worrying signs of discord within the eurozone. Spain faces a backlash from the European Union after declaring new deficit targets for 2012 ... And yesterday's news that the Netherlands would (according to Lombard Research) be better off quitting the euro has caused quite a stir. With China cutting its growth forecasts yesterday, and fears of a new oil spike, it feels like a nervy day ...