European markets plunge ahead of meeting on Greece; No deal expected

The eurozone finance ministers meet in Luxembourg on Thursday afternoon, with Greece in focus. However, hopes for a deal faded away after Greek Prime Minister Alexis Tsipras said he’ll reject any agreement that imposes “catastrophic” policies on the burdened country.

Greece's chief negotiator and junior foreign minister Euclid Tsakalotos told the BBC Radio 4 Today programme that any deal had to be one that was economically feasible.

"We think that we have been in a compromising mood, we've been suggesting ideas, whereas the institutions presented a paper that was very close to their original bid," he said.

"So what we are saying is that further compromises can be made, we can search for common ground, but the end product of what we agree on reforms, on the financing for the future, on the investment programme must be economically feasible."

Tsakalotos noted:

"So if we agree for a fiscal surplus of 1% this year and 2% next year, then I have to be able to tell [the Greek prime minister] that we can meet that, not that we're going to have more recession that will make those targets unfeasible, and then the Europeans will come back and say: 'You can't talk to the Greeks because they never deliver their promises'."

Earlier, junior foreign minister told Reuters news agency that without help, Greece would be unable to meet its obligations to the IMF on 30 June.

Earlier this week, Greece's finance minister Yanis Varoufakis told the German Bild newspaper that he won’t present a new reform plan at Thursday’s meeting noting that Greece remains willing to find a solution but creditors need to take Greece’s proposals seriously to end the standoff.

When asked if he would present such a list, Varoufakis replied:

“No, because the Eurogroup (of euro zone finance ministers) is not the right place to present proposals which haven’t been discussed and negotiated on a lower level before.” Negotiations remain frozen after Greece's latest plan was dismissed as inadequate on Sunday night.

Holger Schmieding, chief economist at Berenberg, said in a note that “No news is bad news at this stage. There is no sign that Greece will shift its position to allow for a deal at today’s Eurogroup meeting of finance ministers. If that meeting fails, we would expect a last attempt at the top political level thereafter to break the impasse.”

When addressing the German parliament Thursday morning, German Chancellor Angela Merkel said a deal between Greece and its creditors is still possible.

Greece’s stock market has fallen almost 2% in early trading, hitting a new three-year low.

On Wednesday the Athens General Index closed 3.2% lower which takes its loss for the past four trading sessions to almost 19%, the lowest level since 2012.

Europe’s stock markets are in the red again, despite Merkel’s commentaries.

Germany’s DAX 30 index dropped 0.6% to 10,911.17, while France’s CAC 40 index lost 0.6% to 4,761.38.

The U.K.’s FTSE 100 index  gave up 0.3% to 6,663.65.