Greece and its four lenders held bailout talks, with both sides expressing optimism about progress. Negotiations on an €86 billion ($94.5 billion) aid package, or a second temporary loan, needed to be completed by August 20 so Greece could repay €3.5 billion due to the European Central Bank that day.
Greek Economy Minister George Stathakis sounded optimistic as he arrived for the talks. “We have a task to complete and an agreement to reach within ten days, and we are working toward that,” he said. The package would be the heavily indebted country’s third bailout, intended to prevent bankruptcy and an exit from the euro area. European Commission President Jean-Claude Juncker told Agence France-Presse that Greece could reach an agreement quickly, preferably before August 20, and said the negotiations were proceeding satisfactorily.
Greek government spokeswoman Olga Gerovasili said an early election was likely in the autumn after Alexis Tsipras’s left-wing government lost its parliamentary majority. She told Vima FM that this depended on the government’s stability in the coming period. Members of a trade union linked to the Communist Party protested against austerity yesterday. Between 350 and 400 people entered the Labor Ministry, where union representatives met Labor Minister George Katrougalos.
Greek bank shares suffered heavy selling for a third consecutive day yesterday, although losses were considerably smaller than in earlier sessions. The banking index fell 20.3 percent after dropping about 30 percent in each of the previous two sessions, suggesting some buyers were returning. The main Greek stock index, ATG, surrendered modest opening gains and fell 2.3 percent under pressure from banking shares, which represent around 20 percent of the index.
European shares rose, led by Société Générale, which jumped 7 percent after reporting second-quarter results. The FTSEurofirst 300 gained 0.8 percent to 1,593.03, while the euro-area blue-chip Euro Stoxx 50 rose 0.85 percent to 3,650.24. Britain’s FTSE 100 increased 0.3 percent, France’s CAC 40 gained 0.95 percent, and Germany’s DAX climbed 1.1 percent.
The dollar rose yesterday to a three-and-a-half-month high against a currency basket after Atlanta Federal Reserve President Dennis Lockhart, a voting member of the Federal Open Market Committee, supported a September interest-rate increase.
The dollar index rose 0.1 percent to 98.096 after reaching 98.218 in Asian trading, its highest level since late April. The euro fell to a two-week low of $1.0847. Lockhart told The Wall Street Journal it would take a significant deterioration in the US economy for him not to support a September rate rise.
Gold fell toward its lowest levels in five and a half years as Lockhart’s comments supported the dollar. Spot gold declined 0.1 percent to $1,085.80 an ounce, while US December futures fell 0.5 percent to $1,085.50.