Greek optimism tempered by finance chiefs as plan sows confusion

Euro-area finance ministers closed ranks to temper optimism that a deal on Greece was in the offing, saying that expectations of a breakthrough were inflated amid confusion over new proposals intended to unlock aid.

With markets surging on hopes of an imminent accord, finance chiefs arrived for a meeting in Brussels on Monday united in dousing hopes of a rapid deal. Dutch Finance Minister Jeroen Dijsselbloem said it was “impossible to have a final assessment” of the Greek proposals since they had arrived so late, while his Irish counterpart, Michael Noonan, said he expected ministers to have to meet again on Thursday.

“I think this day is going to be a non-entity,” Finnish Finance Minister Alexander Stubb told reporters. “This seems to be a little bit of a Monday where we have wasted a lot of air miles both on the finance ministers’ side and on the prime ministers’ side, because I don’t foresee a breakthrough today.”

The wave of negativity defied a rally of Greek bonds and shares on Monday after the Greek government said it had presented a new plan reaching out to creditors, with measures including eliminating early retirement options as of next year. The European Central Bank added to the prevailing sentiment by raising emergency funding for Greek lenders for the third time in less than a week, according to a person familiar with the decision.

The Athens Stock Exchange index was up 6.6 percent as of 2:44 p.m. local time after having earlier gained as much as 8.9 percent on confidence that a deal was within reach. The yield on bonds maturing in 2017 dropped 488 basis points to 23.99 percent while the 10-year bond yield dropped 149 basis points to 11.18 percent.

Merkel, Tsipras

“We are coming to these discussions aiming to strike a financially sustainable agreement,” Prime Minister Alexis Tsipras told reporters ahead of a meeting in Brussels with European Commission President Jean-Claude Juncker. He is due to meet later on Monday with fellow euro-area leaders including German Chancellor Angela Merkel and French President Francois Hollande for an emergency summit on Greece.

German Finance Minister Wolfgang Schaeuble said finance chiefs had yet to receive the “substantial proposals” needed to prepare the ground for leaders. That may mean a two-day EU summit scheduled to begin on Thursday is the ultimate forum for any accord.

“It’s the start of a process,” Noonan told reporters. “There was such confusion during the night with alternative versions of the Greek proposal coming in that there hasn’t been any preparation,” he said. “My expectation is we’ll be meeting again on Thursday before the full council meeting.”