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Eurogroup meeting ends without major progress on Greek debt proposals but to meet again on Thursday

The Eurozone finance ministers have ended their emergency meeting in Brussels today without any major progress for resolving the heightened impasse between the Greek government and the creditors. Before the Eurogroup meeting got underway, the European Central Bank met to discuss extending the emergency liquidity assistance to Greek banks. The ECB agreed to extend the ELA by 2 billion euros to 88 billion euros. As savers continued to raid Greek banks, with some reports are suggesting that the withdrawals for Monday have exceeded 1 billion euros, the ECB will convene again tomorrow to decide whether to increase the ELA ceiling further .

European markets opened positively and were optimistic of a deal. The Athens stock exchange rallied initially before halving the gains on the news that the meeting ended without any progress but later recovered to post gains of over 8%. The president of the Eurogroup, Jeroen Dijsselbloem, had already dampened hopes of an immediate deal and was quoted as saying before the meeting “it is impossible to have a final assessment”.

There was further confusion after reports suggesting that the Greeks had sent the wrong documents to the Eurogroup last night due to a mix-up and a new version was submitted only this morning. It was later confirmed that the two versions were not very different and the second version contained only some minor amendments.

The Greek finance minister, Yanis Varoufakis did not help matters after arriving late for the meeting, though the prime minister, Alexis Tsipras received a warmer welcome from EC President, Jean-Claude Juncker, at a meeting prior to the Eurogroup meeting.

At the press conference that followed the Eurogroup meeting, Dijsselbloem said that the latest proposals put forward by the Greek side were comprehensive and can form the basis for an agreement but that more time was needed to analyze the details. The Eurogroup will meet again on Thursday and the summit of Eurozone leaders was still scheduled to go ahead tonight. Dijsselbloem said Thursday’s meeting was with the “view of reaching a deal by the end of week” and Pierre Moscovici of the European Commission said that while “work needs to be done” on the Greek proposals, the Troika now have the “mandate” to reach an agreement.

Given the reaction of risk assets, the markets viewed today’s developments as positive with markets expecting an agreement by the end of the week. German 10-year bund yields rose while Eurozone periphery bond yields fell.  Gold prices fell sharply as risk aversion faded, dropping from a high of $1,200.95 per ounce to $1,182.05. The euro remained fairly resilient during the course of the day and managed to briefly top the 1.14 handle against the dollar before retreating to around 1.1365. Against the pound, the euro peaked at 0.7185 but later dropped back to around 0.7177, while against the yen, the single currency was flat at 139.84.

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