Markets showed signs of stabilising today after big losses yesterday in the wake of renewed fears about the health of the European banking sector.

In his first speech since agreeing to coalition talks with Angela Merkel’s conservatives, the leader of the Social Democrats delivered an impassioned defence of European bailouts, saying Germany’s own success hinged on that of its neighbours.

The Jobs Minister has signalled an easing of the austerity in forthcoming budgets if a deal on our bailout is secured.