Debt crisis: live

But will Chancellor Merkel be impressed?

Perhaps going too far in the creeping department and showing a touch of desperation, Monti pleads that his economic reform agenda actually makes him a kind of honorary German.

“It is not for nothing that I'm personally in Italy often viewed as ‘very German’,” he insisted.

09.10 On the ECB interest rate note, Bruno Waterfield - the Telegraph's man in Brussels - writes to tell us:

Will ECB cuts its interest rates to a historic low of under one per cent tomorrow?

It's not ruled out. Peter Praet, the ECB's chief economist told FT Deutschland: "There is no doctrine that the interest rate can not be less than 1.0pc"

09.07 With the eurozone's private sector downturn easing only slightly in June - with Markit's composite PMI for the region revised up to 46.4 from a preliminary reading of 46 - expectations are rising for an interest rate cut by the European Central Bank.

Chris Williamson, chief economist at data provider Markit, said:

Even Germany looks to have fallen into a renewed decline, though only a very modest drop in output is signalled. The pace of downturns in other major euro member states is far more worrying

08.58 In a sign that Europe's economic powerhouse is suffering from the ramifications of the eurozone crisis, Germany's services sector unexpectedly stagnated in June.

Markit's services Purchasing Managers' Index (PMI) fell to 49.9 in June from 51.8 in May, just below the 50 level that separates growth from contraction.

The reading was the lowest since September last year, driven by lower levels of new work for the third month running and a sharp fall in business expectations.

08.55 And in France, the contraction in the services sector eased in June. The Markit/CDAF final purchasing manufacturers' index for the services sector jumped to 47.9 in June from 45.1 in May.

But in a sign of muted sentiment, the business expectations reading dropped to 52.5 from 59.5, its biggest monthly decline since the late-2008 global financial crisis and its lowest level in more than three years.

08.51 While in Italy, services activity contracted for the 13th month running. The Markit/ADACI Business Activity Index, covering service companies from hotels to banks, edged up to 43.1 in June from May's 42.8. The fall came as the pace of job losses accelerated.

08.48 Some of this morning's first economic data has dropped.

In Spain, the Purchasing Managers' Index for the services sector, which makes up around 70pc of the country's economy, was 43.4 in June, up from 41.8 in May.

That was better than the 41.5 level forecast by economists, but still a long way from the 50 mark that divides growth from contraction.

08.37 This might not fill Mrs Merkel with confidence as she prepares to meet Mario Monti. According to a report late last night, former German chancellor Helmut Schmidt (pictured below with Margaret Thatcher in 1979) has been talking of a "profound crisis". He apparently said:

After half a century since the beginning of European integration, we find ourselves in a profound crisis in almost all of the European institutions

He argued that Germany has a legal obligation to continue supporting and rescuing Europe under Article 23, paragraph 1 of the German Basic Law, which requires Germany to participate in the development of the European Union:

Either to fight the financial crisis as individual states with dwindling prospects of success, or we return to the concept of progressive European network

08.30 Also on the agenda for today is a meeting between Italian prime minister, Mario Monti, and German chancellor, Angela Merkel, in Rome at 2.30pm. It will be the first time the pair have met since last week's summit.

Their meeting comes as Greece prepares for a visit from officials from the so-called Troika - the European Commission, International Monetary Fund and European Central Bank - who will be checking up on the country's progress in implementing its €173bn bailout programme.

Greek prime minister, Antonis Samaras, and finance minister, Yannis Stournaras, will meet with EU and IMF representatives in Athens at lunchtime tomorrow.

08.25 We're expecting data later this morning which should give another indicator of the eurozone's economic health. The region's service sector PMI and retail sales data are due at 9am and 10am respectively.

08.02 Meanwhile, Christine Lagarde, the managing director of the IMF, said yesterday that the ECB should beef up its purchases of peripheral debt rather than cut interest rates. She told CNBC:

We are not sure this is the best channel at the moment. Germany does not need a lowering of interest rates set by the ECB but Italy and Spain do, so you can't dissociate when you use that kind of monetary policy instrument. On the other hand, the (ECB) asset purchase program is much more selective and can be used in a more judicious way.

07.53 David Cameron also said yesterday that Britain could restrict immigration of Greeks and other migrants from eurozone countries affected by Europe's sovereign debt crisis in the event of "extraordinary stresses and strains". He said:

The legal position is that if there are extraordinary stresses and strains it is possible to take action to restrict migratory flows, but obviously we hope that doesn't happen.

I would be prepared to do whatever it takes to keep our country safe, to keep our banking system strong, to keep our economy robust.

07.45 All eyes might be on a certain Mr Diamond today, but the debt crisis blog lives on - and so do the economic woes.

Yesterday, the International Monetary Fund warned that America's politicians risked turning a tepid recovery into a recession next year if they failed to reach agreement on how quickly to cut the US deficit.

Also, France cut its growth forecasts, as the country's PM warned of its own "crushing" national debt mountain. The government now expects the French economy to grow by just 0.3pc this year, compared with previous estimates of 0.7pc.

07.30 Good morning and welcome back to our live coverage of the European debt crisis.

Debt crisis live: archive