Hope of Greek breakthrough spurs market

Chris Papadopoullos
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European Commission president Jean-Claude Juncker said a deal with Alexis Tsipras would be finalised this week.
Greece's creditors said yesterday that the country had submitted its first set of comprehensive reform proposals since negotiations began in February, causing European markets to rally on hopes that a deal would be struck within days.

After a Brussels meeting of Eurozone finance ministers, European Council president Donald Tusk said the new draft of proposals sent in by the Greeks were “the first real proposals in many weeks”.

Jeroen Dijsselbloem, the Dutch finance minister and president of the group of finance ministers known as the Eurogroup, said the proposals were “broad and comprehensive”. It stands in stark contrast with comments on earlier drafts of proposals that officials labelled vague, insufficient and incomplete.

But he said that more time would be needed to fully analyse them.

Stocks in Athens rocketed by nine per cent and substantial gains were made in other European markets. The French Cac 40 and German Dax both climbed 3.81 per cent.

Leading the rally in Greece were banking shares. Shares in three of Greece’s four largest retail banks soared by more than 20 per cent. However, most are still below levels seen in May.

Eurozone heads of state met later in the day, after which a defiant European Commission president Jean-Claude Juncker said: “We will finalise the process this week.”

He said the Greek reforms were “a major step taken by the Greek authorities into the direction of the expectations of the three institutions”.

Eurozone finance ministers will meet again tomorrow, Juncker said, and will hope to produce results to be submitted to the European Council on Thursday.

Juncker denied that there had been any discussion of capital controls for Greek banks at the heads of state meeting. He also said that now was not the time to talk about debt relief.

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