European shares drop due to Greek/IMF deadlock

<p>The International Monetary Fund has withdrawn its negotiating team from Brussels.</p>

European stocks have fallen in today's trading (June 12th) due to the ongoing stalemate in the Greek debt renegotiation process. 

The pan-European FTSEurofirst 300 was down in early deals, as investors reacted negatively to news that the International Monetary Fund (IMF) has withdrawn its negotiating team from Brussels.

It marks the end of the latest attempt to reach a deal with the Greek government after it postponed a debt repayment earlier this week. As of 13:00 BST, the index was down 0.6 per cent.

However, European Commission president Jean-Claude Juncker still believes there is light at the end of the tunnel, as he doesn't think the IMF has given up hope of striking a deal.

Mr Juncker believes a solution is "necessary" in order to protect Greece's position as a member of the eurozone, and that is why he is in constant contact with Greek prime minister Alexis Tsipras. 

"I spoke at length with [Mr Tsipras] last night and I will probably do so in the days to come," he added.

German chancellor Angela Merkel has also waded into the issue, urging Greece to continue to push for a deal with its creditors before the end of June. If a deal is not agreed by then, Greece runs the risk of defaulting on its EU and IMF lenders.

"Where there's a will there's a way, but the will has to come from all sides so it's important that we keep speaking with each other," Ms Merkel stated. 

Mr Tsipras has so far shown no signs of buckling under the pressure, despite the fact European leaders want him to cede ground and strike a deal with lenders. But if the Greek government does not accept the demands of the creditors it faces an uncertain future. 

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