Investors have cheered the fast-receding threat of crisis in Greece, piling back into shares and government debt on hopes of a deal between Athens and its European creditors.
Athens submitted reform plans to the European Commission last night, which must be approved to extend the struggling nation’s bailout for another four months while negotiations continue over a likely third bailout.
Greece’s current bailout deal expires on February 28, posing the threat of a bank collapse and the nation hurtling out of the euro without a new deal.
But Commission officials said plans were “sufficiently comprehensive to be a valid starting point”, sending Greece’s main stock market up almost 7% to its highest since last December.
The biggest riser was the National Bank of Greece, which jumped 13%. The government’s cost of borrowing for 10 years also fell as investors decided Greek debt looked a safer bet.
Greece’s Syriza party has pledged to not roll back any privatisations, and ensure any efforts to address a “humanitarian crisis” do not hurt its budget, according to the document.
The list also includes pledges to reform tax policy, review and control spending in “every area” of government, as well as compromises on pension cuts.
It is sticking to its pledge to raise the minimum wage, in consultation with European partners.
