EUROPEAN and US shares slipped lower yesterday amid continued uncertainty over Greece’s debt problems.
Equities had rallied earlier in the week on reports of provisional agreements between Greece and its creditors, but later dropped off when German finance minister Wolfgang Schaeuble said that not much progress had been made.
In a last-ditch effort to receive more funds before it runs out of cash, the Greek Prime Minister Alexis Tsipras’s government has alternated between criticising its creditors – especially the International Monetary Fund (IMF) – and declaring that a deal is nearly done.
Last night, a Greek government official said that Tsipras held an hour-long teleconference call with German Chancellor Angela Merkel and French President Francois Hollande as part of ongoing negotiations over a cash-for-reforms deal. Without a deal, Athens risks default or bankruptcy by the end of next month.
Earlier in the day, IMF managing director Christine Lagarde said there was still a lot of work to do before a deal could be struck.
Lagarde was quoted by a German newspaper saying that a Greek exit from the Eurozone was also a possibility. According to the report, she said that a so-called “Grexit” would “not be a walk in the park” but would “probably not” mean the end of the euro.
Meanwhile, Greece’s lead negotiator and deputy foreign minister Euclid Tsakalotos, said yesterday that all sides were drawing closer to a deal but a final “trade-off” would need to be arranged among senior political figures.