Hopes of Greek deal spark relief rally

London

A RELIEF European stock, bond and euro rally reflects hopes that creditors would accept the proposals of Greek premier Alexis Tsipras. The outcome, however, is unpredictable and optimism may be premature.

The key is whether the French and European Community (EC) leaders, who back a deal and desperately want Greece to remain a member of the eurozone, can win over sceptical German and smaller eurozone states. Given the extent of the economic depression, they believe that the Greek government would not be able to meet promises and may well oppose Greece's request for a third bailout of 54 billion euros (S$78.5 billion). A further uncertainty is whether the European Central Bank (ECB) would continue to provide emergency lending to Greek banks.