Eurozone crisis live: Greek deal on knife edge

9.01am: Spain has just released GDP figures for the fourth quarter and 2011. Its economy shrank by 0.3% between October and December from the previous quarter (following zero growth in the third quarter), and grew by 0.7% over the year as a whole.

The Bank of Spain also estimates that the economy will contract by 1.5% this year, and return to meagre growth of just 0.2% in 2013.

8.47am: Reuters is reporting that EU ambassadors have agreed to impose an embargo on Iranian oil imports, but decided to postpone the full implementation of the ban until 1 July. The news agency cited a senior EU diplomat.

The EU's 27 foreign ministers, who are meeting in Brussels today, still have to formally approve the ban. EU governments will have to stop signing new contracts with Tehran as soon as the ban is in place, but will be able to fulfill existing contracts until 1 July.

8.43am: The Footsie is now up nearly 20 points at 5749, a 0.3% rise. On the continent, shares have also edged higher, with the Dax in Frankfurt up 5 points and the CAC in Paris 12 points ahead. The euro is trading around $1.2925. Markets are nervous ahead of the eurozone finance ministers' meeting in Brussels, with a Greek debt deal shrouded in uncertainty.

8.26am: Today's meeting of eurozone finance ministers in Brussels has a very full agenda to consider, says Michael Derks, chief strategist at FxPro.

There is the latest draft of the fiscal compact to discuss, a review of the progress made in the Greek debt talks, and a conversation on a draft for the European Stability Mechanism (ESM). The latter apparently includes collective action clauses, although any debt write-offs will need to comply with IMF standards. Germany and France are both keen to wrap up the ESM issue as soon as possible, although it can only take effect once it has been ratified by those countries representing 90% of its capital. It is unlikely that any of these issues will be fully resolved at this meeting, although some progress will be made.

Interestingly, these days the single currency is setting less store in meetings such as these, in sharp contrast to those held in the final quarter of last year. After threatening $1.30 at one stage early on Friday, the euro drifted back to near $1.29.

8.07am: Brent crude futures were steady around $110 a barrel this morning, as concerns about European demand were outweighed by fears over supply disruptions from the Middle East.

Eurozone finance ministers meeting in Brussels today will discuss what terms of a Greek debt restructuring they are ready to accept as part of a second bailout package for Athens.

The debt swap discussions with private creditors have been aimed at reducing Greek's debt to 120% of GDP, from around 160% of GDP. Without a second bailout Greece will not be able to pay back €14.5 bn of maturing bonds in March, which would likely trigger a messy default and could plunge the eurozone into disarray.

EU governments are also expected to agree new economic sanctions against Iran over its nuclear programme today.

Ben Le Brun, market analyst at OptionsXpress, told Reuters:

Both of these meetings are going to be crucial in dictating oil prices. Any indication of a plan getting approved to tackle Greece's debt would support oil. An Iranian oil embargo would also boost prices as demand continues to improve.

8.04am: The FTSE 100 index in London has opened more than 10 points higher at 5739, a 0.2% gain.

Many Asian markets – China, Hong Kong, Singapore and South Korea – were closed for the Lunar New Year holiday. Stock markets that were open for business were mixed, amid light volumes. Japan's Nikkei was flat at 8,765.90.

7.59am: The main event today is the meeting of EU finance ministers this afternoon. Here's today's agenda:

• Franco-German finance and economy council meets in Paris. Press
conference – 10.15am GMT (11.15am CET)
• Eurozone consumer confidence of January – 3pm GMT
• European finance ministers meet in Brussels – 4pm GMT (5pm CET)
• Christine Lagarde gives speech on 2012′s economic challenges -
5.30pm GMT (6.30pm CET)

Bond auctions
• Germany to sell €3bn of 12-month bonds – 10.15am GMT
• France to sell up to €8.3bn of Treasury bills – 1.50pm GMT

7.30am: Good morning and welcome back to our rolling coverage of the world economy and eurozone debt crisis. Hopes of a deal in Greece with private bondholders in time for the eurozone finance ministers' meeting have dwindled after the bondholders' representative, Charles Dallara, managing director of the Institute of International Finance, left Athens on Saturday.

Creditors have made their 'best offer,' and are not willing to take any more than a 65% to 70% loss on the current value of Greek debt (with a coupon of 4%-4.5%, while the IMF has indicated it wants a coupon closer to 3%).

Even that wouldn't be anywhere near enough to tackle Greece's mounting debt burden, says Michael Hewson, market analyst at CMC Markets.

Let's not forget that we started out at a 21% haircut at last July's EU summit and the number has kept going up, at the same rate that Greece's economy has been spiralling down.

It remains unlikely that a deal will be reached by the end of today's EU finance ministers' summit, as originally hoped. Even so Greek officials remain confident that a deal can be reached by the next EU summit on 30th January but time is short, given the deadline of a €14.5bn bond repayment in March.