Markets hold steady as Greek stand-off continues

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Uncertainty continues as Greece fails to meet IMF loan repayment

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European markets have remained steady following Greece’s failure to repay a loan to the International Monetary Fund (IMF).

The London, Paris and Frankfurt exchanges saw modest rises at the start of morning trading following Tuesday’s 22:00BST passed without an agreement being reached between the Greek government and the international lender.

As morning trading began the FTSE was up 77 points, the CAC40 98 points and the DAX 90 points as of 10am BST. The euro stood at €1.1136 against the USD.

Eurogroup finance ministers are due to speak via teleconference at 16.30BST to discuss on the ongoing situation, which has seen Greece become the first Eurozone country to default on an IMF loan.

Speaking after the deadline passed Italian finance minister Pier Carlo Padoan gave hope that a deal could still be  reached saying: “As far as I’m concerned, as far as my colleagues in (the) Eurogroup are concerned, there’s always a deal open (for Greece).

“The debt profile of Greece is much less worrying than …is often portrayed. What Greece needs is to return to growth, and to return to growth Greece needs confidence, credit and especially structural measures.”

The European Central Bank is not expected to cut off liquidity to Greek banks, though concerns that it will raise the price of borrowing to unfordable levels remain.

The failure to reach an agreement means that the EU-IMF proposal to extend Greece bailout conditions is no longer valid. It is unknown whether the Greek government will still go ahead on July 5 with a proposed referendum on the proposal.

Greek Prime Minster Alex Tsipras had called for Greek voters to reject the EU-IMF deal.  Polls currently indicate that 57pc of voters intend to reject the deal as opinion moves closer to backing a Yes vote.

Following the deadline passing an IMF formally placed Greece in arrears with a spokesperson saying “We have informed our Executive Board that Greece is now in arrears and can only receive IMF financing once the arrears are cleared”.

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