European stocks surge on hope of Greece deal this week

European stock markets surged Monday on hope that Greece would seal a deal with its EU-IMF creditors this week to save the country from default and a possible euro exit.

Eurogroup head Jeroen Dijsselbloem sounded an optimistic note following a meeting of eurozone finance ministers in Brussels to review new reform proposals by Greece.

Athens’ plans are a “welcome step” and “an opportunity to get that deal later this week and that is what we will work for,” Dijsselbloem told reporters, adding that the Eurogroup would likely meet again later this week.

In the euro area, the CAC 40 in Paris jumped 3.81 percent to close at 4,998.61 points while Frankfurt’s DAX 30 also gained 3.81 percent to stand to 11,460.50 points.

The Milan stock exchange won 3.46 percent, Madrid climbed 3.87 percent and the Athens Composite Index rocketed 9.0 percent.

Outside the eurozone, London’s benchmark FTSE 100 index of top companies rose 1.72 percent to end the day at 6,825.67 points.

Meanwhile the leaders of the 19 countries in the euro area are set to hold an emergency summit on Greece later Monday in Brussels.

The Greek proposals sent to Brussels overnight were a last-ditch bid to unlock the final 7.2 billion euro tranche of its international bailout, which creditors have refused to release unless Greece agrees to more austerity measures.

Without the bailout cash Greece will be unable to pay a 1.5-billion-euro IMF payment on June 30, and a default could send Athens crashing out of the single currency and possibly the European Union.

Greek Economy Minister Giorgos Stathakis said its EU-IMF creditors had broadly accepted the new reforms proposed by Athens.

“They have accepted that the new proposals of the Greek government is a proper framework on which to work on and, with some adjustments that will be the issue of discussion for the next day or so, we’ll end up with proper technical solution as well,” he said in an interview.

On the foreign exchange market, the euro rose to $1.1388 from $1.1349 late in New York on Friday.

– ECB supporting Greek banks –

The European Central Bank (ECB) again increased emergency liquidity funds for Greece’s banks Monday, according to a Greek bank source who said the ECB may renew the hike “at any time” if necessary.

The new increase of the ECB’s Emergency Liquidity Assistance was the third since Wednesday, and came as Greek savers continued withdrawing their money in large volumes from the country’s banks.

“Behind the scenes, the European Central Bank remains active in keeping Greek banks on life support,” said Alistair Cotton, senior dealer at Currencies Direct.

Wall Street stocks rose Monday, following European equity markets higher on hopes of a breakthrough in negotiations with Greece.

Around mid-day in New York, the Dow Jones Industrial Average was up 0.79 percent at 18,157.55 points.

The broad-based S&P 500 gained 0.89 percent at 2,128.69, while the tech-rich Nasdaq Composite Index advanced 0.84 percent to 5,160.15.

Asia’s main markets also rose Monday on optimism for a Greek debt deal, with Tokyo up 1.26 percent, Seoul gaining 0.40 percent and Sydney adding 0.24 percent.

Hong Kong jumped 1.20 percent, while Shanghai was closed for a public holiday.


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