Forex News – Euro falls as Greek debt talks weigh

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The euro is weakening against most counterparts in the European trading session on Monday Greek debt talks are dominating market sentiment.

Negotiations between Greek policy makers and international creditors continue today after Sunday’s marathon meeting that failed to meet common ground so far on the terms of a second bailout that Greece needs to avoid default.

Initially it was thought that the debt deal deadline was today by 10:00 GMT, which was when the European  Union was supposed to be notified whether the Greek government will accept the tough terms of the second  bailout worth 130 billion euro. A scheduled Eurogroup meeting with euro zone ministers today was postponed due to the delay in Athens.

However, reports from a Greek government official denied such a deadline existed.

 

The official said however, that the entire Greek side had to agree terms with the international lenders before the Eurogroup of euro zone finance ministers next meets. This means all coalition parties of which there are three that currently make up the Greek government, must agree.

“The only deadline is to have a staff agreement for the second bailout and the agreement of the political leaders before Eurogroup,” he said.

No date has yet been set for the Eurogroup meeting, although it is expected this week.

A major sticking point in negotiations is the additional austerity measures like labour reforms, that the Greek government is opposing. The other big issue left to be discussed today is Greek banks which are up to their necks in Greek government bonds now worth a fraction of their face value.

Euro has fallen some 100 pips against the dollar since the  start of trading today, and is currently at a low of 1.3029 at 09:30 GMT.