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The International Monetary Fund has withdrawn its negotiating team from Brussels.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300 was down in early deals, as investors reacted negatively to news that the International Monetary Fund (IMF) has withdrawn its negotiating team from Brussels.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

Join our live webinars for the latest analysis and trading ideas. Register now

GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.