Stocks in Athens were up as much as two per cent this afternoon, after the European Central Bank (ECB) offered a lifeline to Greece this afternoon, increasing the amount of emergency liquidity its banks can draw on for the second time this week.
Reuters reported that the ECB had extended emergency liquidity assistance (ELA) for the country by €3.3bn (£2.4bn). That's on top of a €1.1bn hike earlier this week.
The move came after reports suggested savers in Greece may have withdrawn as much as €3bn from banks in recent days. The BBC said savers had been slowly transferring their funds out of the country – which IG market analyst Joshua Mahony dubbed a "slow-motion run on the banks". The amount is significantly higher than the €2bn of capital flight reported earlier.
Although it had been feared Greece may be forced to introduce capital controls, the ECB's decision suggested this is now unlikely over the next couple of days.
Negotiations broke down yesterday at a meeting of the Eurogroup of finance ministers, at which there had been slim hopes of an accord.
In response, George Osborne said today that the UK must "be prepared for the worst" on Greece. In a tweet this morning, the chancellor said that "while we hope for the best, we now need to be prepared for the worst".
Meanwhile, reports suggested Russia was planning to finance a gas pipeline sending Russian gas to Greece. Alexis Tsipras, Greece's prime minister, has met with Russian President Vladimir Putin in recent days to thrash out a deal. The meetings had been seen as provocative to the European leaders Tsipras is attempting to thrash out a deal with.
After yesterday’s talks broke down an emergency summit has been agreed between Greek Prime Minister Alexis Tsipras, German Chancellor Angela Merkel, and French President François Hollande in a last-ditch attempt to come to an agreement.
Greece’s current bailout agreement ends on 30 June, and without a new deal, it has said it won’t be able to pay creditors, including the IMF.