European stocks are expected to follow Asia higher at the open, boosted by an unexpected jump in data from the US services sector on Tuesday.
The FTSE , DAX and CAC are all expected to open 1 percent or more higher.
The European Commission welcomed news that Italy has raised the value-added tax in a bid to meet its fiscal targets. Whether the move helps push Italian bond yields lower at the open could determine sentiment for the European session.
Later on Wednesday, the constitutional court in Germany will rule on whether Angela Merkel’s government broke the law by taking part in the 110 billion euro ($154 billion) rescue of Greeceas lawmakers in Berlin debate the 2012 federal budget. Greece’s inability to meet its fiscal targets is likely to dominate that discussion.
Greece’s finance minister denied a report he was planning to speed up reforms and pay off the recent rescue package faster in reaction to a worse-than-expected deficit. In a statement Tuesday night, Evangelos Venizelos said he would speed up Greece’s privatization plan and structural reforms.
Speaking in the New York Times George Soros, the legendary hedge fund manager, warned the euro zone debt crisis could be worse than 2008.
“This crisis has the potential to be a lot worse than Lehman Brothers,” said Soros in the New York Times. “That is why the problem is so serious. You need a crisis to create the political will for Europe to create such an authority, but there is still no understanding as to what the authority will do.”
The foreign exchange market will again be focused on the Swiss National Bank's decision to intervene to halt the rise in the Swiss franc. Shares in Switzerland soared on Tuesday as the Swiss franc fell heavily against the dollar and the euro .
In the UK Chancellor George Osborne is being urged to drop the 50 pence top rate of taxby a group of leading economists.
In Asia overnight the Bank of Japan has left rates on hold while Australian growth data surprised on the upside due to consumer spending and reconstruction work following major flooding in the previous quarter.
Join CNBC's Squawk Box Europe from 0600 London time where we will bring you that exclusive interview with former German Chancellor Gerhard Schroeder. Steve Sedgwick reports from Rome and CNBC's Guy Johnson is on his way to Athens.