Shares rise across Europe over hopes Greece moving closer to debt deal
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Version 0 of 1. Shares in Europe have risen amid hopes that the new Syriza-led government in Greece is edging close to a debt deal with its eurozone partners. Despite warnings from Berlin that no agreement was imminent, financial markets rallied in advance of the first meeting of the eurogroup – the finance ministers of the 19 countries that use the single currency – in Brussels later on Wednesday. Greek bank shares jumped 20% after the Greece’s finance minister, Yanis Varoufakis, said he was seeking a bridging loan that would give him six months to negotiate new terms with creditors. Related: Greece moving closer to bailout compromise, before Schäuble hits back - as it happened Reports suggested he agreed to 70% of the conditions imposed on Greece as the price of its international bailout and was seeking an easing of budgetary constraints in order to ease the burden of austerity. Varoufakis told the Guardian that his team are working day and night to get a deal: “Because we are committed to finding a solution we will do what we can to achieve a mutually beneficial solution. “We will not be dogmatic … we are prepared to discuss everything except two things: perpetuating and producing this never-ending debt deflationary spiral and disavowing our own critique of this programme.” Germany’s finance minister, Wolfgang Schäuble, played down the prospects of a breakthrough on Wednesday, saying it is up to Greece to solve its own problems. Jens Weidmann, president of Germany’s Bundesbank, also took a tough line. Interviewed by Reuters at a G20 meeting in Istanbul, he said: “I am firmly convinced that Greece can only solve its problems in the long run by making its public finances solid and its economy more competitive.” There were also signs that the European commission has been irritated by what it sees as an attempt by Greece’s new government to bounce Brussels into a rapid deal. Commission sources said there was no agreement in the offing. The UK chancellor, George Osborne, also speaking at the G20 meeting, said: “It’s clear that the risks to the world economy, the risk to the British economy of this standoff between the euro zone and Greece, is growing each day. “The risks of a miscalculation or a misstep leading to a very bad outcome are growing as well.” Osborne said the UK had been arguing for both sides in the ongoing Greek crisis to “find some common ground” during the G20 meeting of finance ministers in Turkey. “We know it’s going to be a tough period of negotiations but at least they’ve got some sort of starting point,” said Orlando Green, a strategist at Credit Agricole. “It’s a game of chicken at the end of the day ... it will eventually result in one side bending more than the other, but they both claim victory.” Despite the mixed signals, financial markets were cheered by the prospect that Greece could come to terms with its creditors’ position before its current programme expires at the end of February. Greek bank shares have been particularly vulnerable to concerns that the European Central Bank could cut off all sources of financing should the relationship between Greece and its eurozone partners deteriorate over the coming weeks. On Tuesday, the Greek stock market rose by 8%, providing a fillip to other European bourses. Shares were up by 1.7% in Italy, by 1.3% in Spain and by just less than 1% in France and Germany. Wall Street also received a boost from hopes of a Greek breakthrough, with the Dow Jones industrial average rising almost 100 points in morning trading. |