Bank stocks sink as European finance ministers prepare for Greece showdown

Emma Haslett
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Alexis Tsipras has won wide support for his plans to cancel Greece's bailout (Source: Getty)

Shares in Greek banks led a 3.5 per cent fall in the Athens Stock Exchange this morning, as European finance ministers from 19 countries prepared to meet in Brussels, with Greek finance minister Yanis Varoufakis expected to push to cancel Greece's bailout deal.

A bailout from the European Union and the International Monetary Fund expires at the end of February. Although it had been hoped Greece would extend the deal, new Prime Minister Alexis Tsipras has pledged not to, which could push it into default.

Today's meeting will take place hours after Tsipras won a confidence vote - including back from his right-wing coalition partner - on his plans to cancel the bailout programme.

In a speech, he vowed Greece would not cave in to demands from its European neighbours.

We are not negotiating the bailout, it was cancelled by its own failure.... I want to assure you that there is no going back. Greece cannot return to the era of bailouts.

German finance minister Wolfgang Schaeuble, who will play a crucial part in today's meetings, has taken a hard line against Tsipras' plans, saying Greece must not renege on the bailout conditions set by the so-called "troika" of the European Union, the European Central Bank and the International Monetary Fund.

Greece currently owes €320bn (£237bn), which equates to 174 per cent of its GDP.

Yesterday Greek defence minister Panos Kammenos hinted that if his country failed to get an agreement from its Eurozone partners, it could turn to Russia or China for help. "It could be the United States at best, it could be Russia, it could be China or other countries," he said.

However, European leaders have low hopes of anything coming of the meeting, they have said.

10-point plan

This morning it was reported that Greece had drawn up a 10-point plan with measures which would replace 30 per cent of its bailout deal.

According to the BBC, the plan includes bond swaps to reduce its debt mountain and a proposal to reduce its primary budget surplus target from three per cent this year to 1.49 per cent.

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