D-Day as Varoufakis lands in Germany

Today´s meetings between euro leaders and Greek politicians are crucial for the future of the euro zone.

Today´s meeting in Frankfurt  between Draghi and Varoufakis will be the latest in a string of tense negotiations between the newly elected finance minister and one of the Greece´s creditors. The tone of the press briefings will be important in determining market sentiment across Europe, as any potential confrontation could spook investors about the possibility of a “Grexit”. With Greek banks suffering a consistent outflow of capital, that is a scenario the new government can scarcely afford.

The Financial Times reported last night that the ECB was set to reject Greek proposals for a bridging loan which would tide the country over after their current financing runs out at the end of this month. However, it appears that the ECB is ready to get tough with Greece, and will veto any deal unless the Greeks agree to certain conditions.

Similarly, the meeting in Brussels between Tsipras and Juncker will be keenly observed. Syriza politicians have appeared polls apart from EU institutions since gaining power, notably refusing to deal with the troika last week. However the Greeks are fast approaching the point where they need to strike a deal. Markets will be hoping for mollifying messages to come out of both.

With Varoufakis set to meet German counterpart Wolfgang Schauble tomorrow, there is a sense that progress needs to be made today to stand any hope of striking a deal.

The euro was trading at $1.1469 at 8.57 CET

The IBEX 35 opened up 37,30 at 10.635,50 after a strong days trading on Wednesday, where the index was buoyed by positive results from Grupo Santander.

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