30th June 2015
European stocks experienced a rollercoaster ride on Tuesday as Greece headed towards defaulting on its debt repayments.
The country looked set to miss a €1.6 billion payment to the IMF due today that would unlock a further €7.2 billion in bailout funds.
Markets across the continent plunged as prime minister Alexis Tsipras urged Greeks to reject a bailout offer in a referendum to be held on Sunday.
However, rumours of a last-ditch attempt to break the deadlock helped lift sentiment and saw markets rebound from the worst of their lows.
Stocks in Spain and Germany even began to rise as reports that Greece could yet agree to the demands of its creditors filtered through.
The European Commission denied it received an 11th hour move from Greece but said the door was still open for a deal.
The euro shed around half a percent against the dollar but was off Monday’s four-week lows as the single currency remained resilient.
But analysts warned that the euro would be in uncharted territory if Greeks reject the bailout terms, as it would call into question the viability of the single currency bloc.
Spanish prime minister Mariano Rajoy warned that if Greece leaves the euro it would send a “negative message that euro membership is reversible”. Italian leader Matteo Renzi called the referendum a straight vote on whether Greece wants the euro or the drachma.
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