European stocks reversed early losses today (February 17th) as investors hoped for a deal after the collapse of Greek debt talks yesterday.
The euro also recovered to rise against the dollar after Greek debt talks broke down on Monday, raising the prospect the country might leave the euro currency. The euro picked up against the dollar to $1.1388 (£0.74), up 0.3 per cent.
Greece rejected a bailout proposal by its eurozone partners, before they told the country to ask for an extension to its existing bailout program before further talks on its financing can take place.
If no agreement is reached soon, investors worry that Greece might have little option but to default and exit the eurozone.
However, traders today reassessed the collapse of Greek debt talks and focused on the prospects of a deal.
"For now, we assume that logic will prevail and this movie won't end in disaster," Paul O’Connor, co-head of the multi-asset desk at Henderson Global Investors, told Reuters.
Both sides raised the possibility of another attempt to find common ground before the end of this week.
The pan-European FTSEurofirst 300 equity index was up 0.1 per cent at mid-day today, while the ATG main Athens share index was down 2.8 per cent
Meanwhile, German finance minister Wolfgang Schaeuble insisted that Greece needs to meet its pre-existing obligations and must make up its mind whether it wants to extend the bailout programme.
"None of my colleagues so far understands what Greece wants… whether Greece itself knows is not clear either," he added, quoted by the BBC.
Greek finance minister Yanis Varoufakis declared he was ready to do "whatever it takes" to reach an agreement over Greece's bailout, despite the collapse of the talks.
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