European stocks rally after Greece bailout optimism

RSTV Bureau
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Symbolic Image ( PTI )

A day after the Eurozone summit in Brussels, the European Commission has asked Greece to spell out the actions it plans to take before any of the European creditors disbursed bailout money.

On Monday, Greece came out hopeful from the emergency meet in Brussels, where it came up with new cash-for-reform proposal.

Greece proposed a funds-for-reforms deal to release the remaining 7.2 billion euros ($8.1 billion) for bailout before the end of the month.

“What we would like to see, other than this fine-tuning of numbers and approaches that is now taking place between the three institutions as we speak, is that we would also like to see that a list of prior actions that are mentioned in the proposals need to be spelled out in the form of a list and this work is now ongoing,” Commission spokesman Margaritis Schinas told a news conference in Brussels.

All 19 Eurozone leaders including German Chancellor Angela Merkel and French president  Francois Hollande welcomed the move. The new budget proposals will now serve as a basis for further negotiations to reclaim the frozen aid and avert a default. A default could prove extremely costly for Greece – an exit from the Eurozone and possibly the European Union.

Officials of the three institutions representing Athens’ creditors – the European Commission, the European Central Bank and the International Monetary Fund (IMF) – analysed the new reforms.

“(European Commission) President Juncker is confident that an agreement can be reached this week,” Schinas said.

Greece plans to impose a 12 per cent one-off tax on businesses with profits of more than 500,000 euros, aiming at cashing in 1.35 billion euros by next year. It also wants to raise corporate tax by three per cent to 29 per cent to secure revenues of 410 million euros in 2016.

On Tuesday, markets too welcomed these measures and the European shares shot up further to a three-week high in anticipation of the deal.