Greek deal hopes boost markets

European stock markets surged on Monday June 22nd, as hopes of a last-minute deal sent optimism to dizzying heights. On Sunday night, Athens presented a new proposal to its European creditors and confidence of a forthcoming agreement from today’s Eurogroup meeting mounted.

However, comments from German chancellor Angela Merkel sought to temper the wave of optimism, as she noted that: “There are still a lot of days in which decisions can be taken.”

Despite this, Germany’s DAX gained more than 3.1 per cent by midday, the French CAC 40 soared by 3.1 per cent and the Euro Stoxx 50 climbed more than three per cent higher. 

Greek markets felt the effects, with the main ATG index jumping by more than six per cent, boosted by the main Greek banks which saw gains over ten per cent. 

Meanwhile, the UK’s FTSE-100 saw modest gains of 1.3 per cent. 

The outlook for Greece and the eurozone positively brightened on Monday, after a new Greek offer for a cash-for-reforms deal surfaced late on Sunday. Rumours suggest the new proposal holds details of some pension changes, which has been a key issue that Greece and its European creditors have been failing to agree on previously. 

Traders now await the outcome of the Eurogroup meeting today, but officials are warning not to expect an outcome yet, as there’s still time for discussions before the deadline expires on June 30th. Nevertheless, news of a fresh Greek proposal has veritably lit a fire under European markets, especially as they appear to contain much needed attempts to reach a compromise.

“The main reason behind the positivity is hope that this latest Greek proposal contains the much needed concessions the country’s creditors have been looking for; described as ‘a good basis for progress’, already these proposals have been received better than the usual ‘insulting’ attempts at reform,” explained Connor Campbell, financial analyst at SpreadEX.

“After a month of interminable claims and counterclaims from each side, there is a bit of excitement on the markets and the genuine semblance of optimism; now this sentiment just has to last the day.”