1300 BST: Italy confirms help for

European Shares Fall for Third Day IBTimes TV

Italy will provide as much as €3.9bn in state backing for Banca Monte dei Paschi di Siena through the underwriting of €1.9bn in so-called "Tremonti Bonds" first sold by BMPS in 2009.

1235 BST: Italian bank rescue?

The first baby-steps of state support for the Italian banking system may be taken today, according to a report today by Reuters and followed in a series of pieces by my colleague Lianna Brinded.

1215 BST: Still Number one

Or, well, at least one of few number ones: Fitch has affirmed its AAA debt rating for the Netherlands and keeps the outlook stable.

The Netherlands' sovereign ratings are underpinned by its flexible, diversified, high-valued and competitive economy as well as current account surpluses and positive net international investment position.

Despite the fall of the government in April and pending general elections, the minority coalition and three-opposition parties were able to secure agreement on a deficit-reduction plan in line with the Netherlands' commitments under the Stability and Growth Pact. This has eased concerns that there would be a prolonged period without a credible plan to ensure that the budget deficit is brought below 3% of GDP consistent with stabilising the government debt to GDP ratio.

1155 BST: Eurogroup statement on Spain

Economy Minister Luis De Guindos says the Eurogroup will make a statement later this afternoon regarding Spain's formal request for funds to protect its banking sector.

1145 BST: New Greek Finance Minister?

Reuters is reporting that Yannis Stournaras will be named the new Finance Minister of Greece after the sudden health-related departure of Vassilios Rapanos.

Stournaras was most recently a professor economics at the University of Athens and General Director of the IOBE, a think-tank known in English as the Foundation for Economic and Industrial Research.

His most recent views of the origins of the crisis were published in the Guardian newspaper in April.

1135 BST: The King's Speech

Outgoing BoE Boss Mervyn King pulls few punches during his testimony to parliament's Treasury Select Committee. King says the outlook for the British economy has worsened (no surprise) and that he's pessimistic about the ability of Eurozone leaders to find the resolve to finally and firmly deal with the on-going debt crisis.

He also said he could not guarantee that the government's newly trumpeted "Funding for Lending" programme would actually succeed in increased bank lending to the private sector - a rather odd admission from the man who announced the scheme during his Mansion House address two weeks ago.

1010 BST: Bank of England Governor Mervyn King, Chief Economist Spencer Dale and policy makers Ben Broadbent and David Miles will all appear this morning before a UK Treasury Select Committee. Some of King's comments are already hitting the wires but it's thus-far standard "we're doing our best, banks are improving" fare. We'll keep an eye on it.

0955 BST: European stocks head south

Equity investors appear spooked by the huge rise in short-term borrowing costs for the Spanish Treasury. Gains across all the major indices are being pared and the FTSE Eurofirst 300 is now down 0.1 percent on the session, followed by modest dips in Spain, Italy and Germany. France's CAC-40 is down 0.3 percent on the session.

0945 BST: Spanish auction

Spain sells around €3bn in 3-month and 6-month Treasury bills at significantly higher yields than in similar auctions in May. The 3-month sale (€1.6bn) yields 2.362 percent compared to 0.846 percent in May.

The 6-month bills will yield 3.237 percent versus around 1.74 percent in May. Demand for both issues fell dramatically from the May sales, despite the huge increase in yields on offer.

0930 BST: British public finances

Public borrowing for the month of May rose to £15.85bn from 12.32bn in 2011, taking the cumulative total for the current fiscal year (April to May) to -4.35bn from 18.751bn in 2011.

When stripping away the costs of the UK's intervention in the financial services sector, the May figure rises further to £17.9bn from £15.195bn in May of 2011.

The May figure is around 65 percent of GDP and represents the highest total for that month on record. The yearly cumulative figure is "flattered", as the Office for National Statistics notes, by the transfer of £28.4bn from the Royal Mail pension fund to the Treasury last month.

0920 BST: Dutch auction

The Dutch State Treasury Agency sold €2.17bn in 10-year "Dutch State Loans" at an average yield of 1.955 percent, a solid performance after this morning's report of a sharp improvement in Dutch GDP for the first quarter.

0910 BST: Italian retail sales slump

April retail sales in Italy fell 1.6 percent, according to the national statistics office ISTAT, after an 0.8 percent fall in March. The April dip is the steepest since at least 2004 and the annual decline - 6.8 percent - is the biggest since records were first amassed by ISTAT in 2001.

0835 BST: Big Dutch GDP turnaround

A major revision for GDP growth in the Netherlands this morning. Dutch GDP, which was first thought to have contracted 0.2 percent, was this morning actually reported to have *expanded* by 0.3 percent. The huge swing was aslo evident in the year-on-year reading, which shows a contraction of 0.8 percent instead of the 1.1 percent first anticipated.

0830 BST: Cyprus bailout

In keeping with the previous four bailouts inside the Eurozone, we're seeing reports from Reuters this morning that the €6bn cost first associated with the financial rescue of Cyprus may not be sufficient to recapitalise its banks. An EU official has told the news agency that €10bn is a far more likely figure to plug the gap.

The increase may, however, reflect an EU desire to offer more money to Cyprus with the aim of convincing it to direct some of the cash towards the broader economy and not simply the banking sector. Cypriot leaders have, to date, resisted the idea of a full bailout from its European partners and have instead preferred to seek bilateral loans from elsewhere, most notably Russia, to support its finances.

Cyprus has a sub-investment grade credit rating from all three major ratings firms and debt to GDP of around 70 percent. It's biggest bank, Cyrpus Popular, lost around €3.6bn last year, largely as a result of the writedown on Greek government debt.

0810 BST: Bond check

We're seeing persistent rises again in benchmark 10-year bond yields for both Spain and Italy this morning, with the latter holding firmly about 6 percent ahead of a €1bn sale of inflation-linked debt later today. Spain's 10-year bonds are holding below 7 percent for the moment (6.87 percent) but the trend is clearly against the debt after confirmation yesterday that the European Central Bank isn't prepared to enter the secondary market and offer price/yield support.

German bund futures for September delivery are trading at 142.02 after opening weaker at 0700 BST, that's helping hold benchmark 10-year yields at around 1.49 percent.

0805 BST: Modest gains - but not in Spain

The bookmakers have it right again: a small rise at the start of European stock trading this morning with the FTSE 100 rising about 0.2 percent in the opening minutes. France's CAC-40 is up 0.3 percent and Italy's FTSE MIB up about 0.1 percent.

The outlier, of course, is Spain's IBEX, which as given up around 0.5 percent in the immediate minutes following last night's downgrade of 28 Spanish banks by Moody's Investors Service. At present, only 7 of the 28 managed to hold onto investment grade status.

0750 BST: Good Morning!

We had a busy overnight session for newsflow and this morning looks to be equally active as a result. To recap, Moody's Investors Service moved last night to downgrade 28 banks in the Spanish financial sector, including the two largest - Banco Santander and Banco Bilbao Vizcaya Argentaria. We also saw the resignation of Greece's Finance Minister, Vassilios Rapanos, due to health issues which saw his suffer from exhaustion and fainting last week.

Meanwhile, Cyprus made a formal request for funds from the European Union, which could reach as much as €6bn, marking the fifth member of the Eurozone that's been forced to seek financial assistance in a crisis that's now threatening to enter its third year.

Overnight shares in Asia fell as investors continued to question the ability of European leaders to effectively deal with the on-going crisis as they prepare for their 20th Summit since Greece's first difficulties began in 2010. The broad MSCI Asia Pacific Index fell by about 0.5 percent to 113.55 while the European single currency traded firmly below the 1.25 level for most of the session. That said, European stocks are set to open modestly higher today, according to financial bookmakers, who anticipate an 8 point rise for the FTSE 100 and a 22 point gain for the DAX.

We'll see two interesting debt auctions later this morning, as well, with an index-linked bond sale from Italy and short term Treasury bill sales from Spain.

Here in the UK we'll figures on public sector borrowing and hear from Bank of England Governor Mervyn King and some of his Monetary Policy Committee colleagues as they appear before a Treasury Committee hearing on inflation.