The Greek Prime Minister says the reforms he has been discussing with the OECD today are those Greece would like to introduce - not those dictated by anyone else.

The re forms we are discussing with the OECD are not reforms that have been imposed upon us. No. They are reforms we would like to introduce.

This is not the right time to criticise the failed programme has followed over the past four years.

But on the side of the troika, what we saw was something like blackmail. “If you don’t cut pensions, if you don’t fire people, we will not give you this bit of funding.”

Tsipras says the troika never made demands based on constructive, structural reforms.

So the main difference between the previous pro gramme based on the internal devaluation is that our reforms are focused on social justice.

We’ve had enough of austerity. Enough. We need to bring back social justice and growth.

Greece has signed a co-operation deal with the OECD, aimed at helping the country implement reforms.

The Greek PM Alexis Tsipras - along with his finance minister Yanis Varoufakis - travelled to Paris today to meet the head of the OECD, Angel Gurría, and other OECD officials.

There will be a press conference at 15.30 Paris time (14.30 UK time), which will be streamed live here.

In the meantime, a Greek official gave this update:

The OECD will provide Greece with the know-how regarding the design and the implementation of reforms which are the priorities of the Greek government.

In the long term, [the OECD] will help the Greek side implement and evaluate not only the progress of the reforms but also their effectiveness.

German finance minister Wolfgang Schäuble has dismissed the accusation that he insulted his Greek counterpart Yanis Varoufakis as “nonsense”.

As we reported earlier, it follows an official complaint lodged by Athens with the German foreign ministry.

Speaking after the eurogroup meeting of finance ministers on Monday, Schäuble described Varoufakis as “foolishly naive” in his dealings with the media.

Schäuble told Reuters on Thursday:

No, I haven’t insulted my Greek counterpart, that is nonsense.

Carney says that with concerns over low inflation (driven by the global oil price slump and falling food prices), generating domestic inflation is necessary to return inflation to the Bank’s 2% target.

He says he expects exactly that, with inflation likely to rise to the 2% over the next two years, in a “sustainable manner”.

We are on track to do that.

The UK economy is performing well. UK growth is solid, unemployment is coming down, and jobs have risen by 600,000 in the past year. Wage growth is showing signs of picking up, rising to 3% for the economy as a whole at the end of last year, and to 3.3% in the private sector.

Average hours worked continue to recover on a strong upward trend. And firms’ labour costs grew an estimated 1.3% in the last quarter of 2014, close to core inflation.

Consumer confidence and retail sales growth are at their highest in over decade. Similarly real income growth is on course to be the strongest for more than a decade. Firms’ investment intensions are robust. Surveys point to solid growth consistent with trend. There is little evidence of a deflationary mindset setting in.

With domestic demand growing at around 3% in 2014, the fastest for 10 years, all these factors will underpin the momentum needed to bring domestic cost growth back to up to a rate consistent with the inflation target.

The fall in inflation we’ve experienced is in large part down to falling energy prices. It is not generalised ‘deflation’ proper.

In our most recent forecast, the Bank expects to return inflation to target within two years and to make limited and gradual increases in Bank Rate over the next three years in order to achieve that in a sustainable manner.

The Bank of England’s governor Mark Carney, is speaking at the Manufacturing Research Centre in Sheffield.

After running through the importance of manufacturing to the UK, Carney moves on to inflation, which is just 0.3% in the UK - well below the Bank’s 2% target.

Over the past two decades, Inflation Targeting central banks have established good track records of keeping inflation from being too high.

But now those central banks, including the Bank of England, are being tested by inflation that is too low.

Persistently low inflation can be difficult. Deflation proper – by which I mean a persistent and generalised decline in prices – is potentially dangerous. During the Great Depression, sharp falls in prices reinforced collapsing output and skyrocketing unemployment.

There would be ... a more clear and present danger arising from the balance sheets of households and firms should deflation persist. This is a concern across the advanced world, where private debt levels remain very high relative to history, including the UK.

[A] debt-deflation dynamic was at the core of the Great Depression and in the Japanese malaise following the collapse of the asset bubbles of the 1980s. It would be a particular concern if the pace of wage growth were to follow prices down.

There is no evidence of that in the UK, where wage growth has picked up over the past six months. And more broadly, following the 2008 financial crisis debt deflation has been the dog that hasn’t barked. But we shouldn’t rest too easy - there are several reasons why the dog might have just been sleeping, and central banks need to be vigilant against the risk that recent low inflation stirs it from its slumber.

From Reuters:

12-Mar-2015 12:27 - ECB GOVERNING COUNCIL RAISES EMERGENCY LIQUIDITY CAP FOR GREEK BANKS VIA THE GREEK CENTRAL BANK BY ABOUT 600 MLN EUROS- BANKING SOURCE

More if and when we get it.

Lloyds Banking Group has published a brief statement on the news this morning that Spanish lender Banco de Sabadell has made an offer for TSB.

Lloyds has a 50% stake in TSB that it needs to sell by the end of the year under the terms of its 2008 taxpayer bailout.

The banking group said it is willing to accept Sabadell’s offer, which values TSB at around £1.7bn.

The Lloyds statement in full:

Lloyds Banking Group plc (the Group) notes the announcement by TSB Banking Group plc and Banco de Sabadell, S.A. in relation to a possible cash offer by Banco de Sabadell, S.A. for the TSB Banking Group plc at 340p per share.

The Group also notes that the Board of TSB Banking Group plc would be willing to recommend an offer at this price, subject to reaching agreement on the other terms and conditions of any offer.

The Group is in discussion with Banco de Sabadell, S.A. regarding the terms of an irrevocable agreement and would be minded to accept an offer at this price if it is made, subject to reaching a satisfactory conclusion on the terms above.

There can be no guarantee that an offer will ultimately be forthcoming. The Group will make a further announcement in due course, as appropriate.

Jens Weidmann, policymaker at the European Central Bank and head of Germany’s Bundesbank, says Greece has lost a lot of trust, and eurozone governments must decide whether to increase their risk exposure to Athens.

Speaking in Frankfurt, he said the eurozone’s central banks should ensure Greece’s banks do not worsen their liquidity position by buying up Greek government debt for which there is still no market.

Other points made by Weidmann:

• He does not believe Greece will regain market access by the middle of the year

• Long-term (eurozone) inflation expectations are anchored

• Negative inflation in the eurozone is just a temporary phenomenon

Further evidence of an increasingly hostile relationship between Greece and Germany has emerged.

Greece has lodged an official complaint with the German foreign ministry after Wolfgang Schäuble reportedly described Yanis Varoufakis as “foolishly naive” in his dealings with the media.

The comment, made by the German finance minister after the meeting of eurozone finance ministers on Monday, has clearly infuriated his Greek counterpart.

Constantinos Koutras, a Greek foreign ministry spokesman described Schaeuble’s comment as insulting.

There was an official complaint from our ambassador in Berlin to the German Foreign Ministry on Tuesday night.

It was a complaint after what he [Schäuble] said about Mr Varoufakis. As a minister of a country that is our friend and our ally, he cannot personally insult a colleague.

Industrial production fell by 0.1% in the eurozone in January, following a 0.3% increase in December.

No sign of a boost from the weak euro.

It disappointed forecasts of a 0.2% increase.

The fall was mainly driven by a 2.2% fall in the production of consumer goods according to the EU’s statistics agency Eurostat.

The largest drops in production were in Latvia (-3.1%), and Finland (-2.5%) while the biggest increase was in Malta (+6.1%).

On an annual basis, eurozone industrial production was up 1.2% in January.

Jessica Hinds, European economist at Capital Economics, said the figures suggested eurozone growth in the first quarter would be weak.

January’s eurozone industrial production data suggest that industry had a poor start to 2015, with little evidence of any boost from the weaker euro or the lower oil price.

The 0.1% fall in production was weaker than the consensus expectation of a 0.2% rise but broadly in line with our own forecast of stagnation. But, on a more positive note, December’s stagnation was revised to show a 0.3% monthly rise.

The country breakdown confirmed that while industrial production (excluding construction) rose modestly in France and Spain, it stagnated in Germany and fell in Italy.

Looking ahead, Q1 could still match Q4’s 0.4% quarterly rise thanks to the strong starting point given by December’s rise – we would only need to see monthly gains of 0.2% in both February and March. And the depreciation of the euro and the lower oil price might give industry a helping hand.

Nonetheless, the broader survey evidence such as the manufacturing output PMI suggest that industrial production growth is likely to remain very weak in the coming months. Accordingly, we see little chance of an imminent pick-up in the industrial sector that would drive a strong recovery in the wider economy.

The UK’s TSB has received a takeover approach from Spain’s Banco de Sabadell.

TSB shares have jumped 27% to 335p.

Sabadell’s is proposing to pay 340p a share, valuing TSB at almost £1.7bn. The Lloyds Banking Group spin off said it was willing to recommend the offer to shareholders.

The UK lender said in a statement:

Based on preliminary discussions, the board of TSB believes that Sabadell could support and accelerate TSB’s retail growth strategy and accelerate the expansion of TSB’s presence in the SME (small and medium-sized enterprise) sector.

Sabadell recognises the achievement of TSB’s management and employees and would continue to operate TSB as a robust competitor in the UK banking market, building on the TSB brand name.

Sabadell is a strong competitor in its home market and has developed a successful international presence in the US. Sabadell believes that the current banking industry dynamics and macro-economic environment make the UK an attractive market for future investment.

The Takeover Panel has given Sabadell a “put up or shut up” deadline of 5pm on 9 April to announce a firm intention to make a bid or walk away (although the deadline can be extended).

Greece’s Prime Minister Alexis Tsipras is in Paris today to meet the head of the Organisation for Economic Co-operation and Development, Angel Gurría.

Tsipras is expected to be joined by his finance minister Yanis Varoufakis, as well as Greece’s minister of state and minister for international economic relations

The meeting will focus on Greece’s reform proposals, which have so far fallen short of eurogroup approval. It is crucial that the Greek plans gain that approval, in order to receive a final tranche of bailout funding.

Tsipras and Gurría will host a press conference at the OECD’s Paris headquarters at 15.30 (14.30 UK time).

The FTSE 100 opened higher this morning and is now up 0.7% at 6,769.61, led by the miners.

Elsewhere in Europe markets are mixed:

• Germany’s DAX: -0.1% at 11,796.97

• France’s CAC: -0.1% at 4,995.03

• Spain’s IBEX: +0.2% at 11,045.40

• Italy’s FTSE MIB: +0.2% at 22,867.16

The euro is up against the dollar this morning, following its sharp fall on Wednesday.

It is up 0.7% at $1.0618 after hitting a low of $1.0509 yesterday (and briefly falling below $1.050 earlier this morning).

The recent sharp falls in the euro - down 12% since the beginning of 2015 - can be explained by the deepening crisis in Greece; the European Central Bank’s recently announced €1.1 trillion QE programme; and the expectation that the US Federal Reserve will raise interest rates sooner rather than later.

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

It promises to be another lively day, kickstarted by comments from the Greek finance minister Yanis Varoufakis.

In an interview with Greece’s Mega TV, Varoufakis commented on the European Central Bank’s refusal to give Athens any leeway to issue short-term debt to meet its funding needs.

The ECB in my opinion is pursuing a policy that can be considered asphyxiating toward our government.

He suggested the ECB was hoping that by being so restrictive, it would force the hand of Greece and its creditors, increasing the urgency of an agreement on reforms.

Varoufakis also had some strong words on his German counterpart/nemesis Wolfgang Schaeuble:

Mr Schäuble has told me I have lost the trust of the German government, I have told him that I never had it. I have the trust of the Greek people.