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Greece scrambles to avert default on its debt

Asian shares got the week off to a strong start and U.S. stock futures and the euro firmed on Monday, after Greece scrambled to avert defaulting on its debt with last-minute proposals aimed at appeasing its creditors.

FILE - In this Friday, May 23, 2014 file photo,  supporters shout slogans and wave Greek flags during the main election rally of the extreme right party Golden Dawn in Athens. The formerly fringe Nazi-rooted party, which won 0,29  percent in the pre-crisis 2009 elections, saw its popularity explode during the bailout years. (AP Photo/Petros Giannakouris, File)

Many investors were still cautious about Prime Minister Alexis Tsipras’s proposals because it was not immediately clear how far they yielded to creditors’ demands for additional spending cuts and tax hikes, nor whether creditors can stomach the offer.

The chief-of-staff to European Commission President Jean-Claude Juncker sent a tweet calling the latest proposal from Greece to resolve its debt crisis a “good basis for progress” in talks at an emergency euro zone summit meeting later on Monday.

“Today will supposedly be the last round of negotiations, so there could be a possible surprise in the form of an agreement with both parties seeing the writing on the wall,” said Shinichiro Kadota, chief Japan forex strategist at Barclays in Tokyo.

“Still, it is unclear when and if an agreement will be reached, and the euro will remain sensitive to headlines over Greece.”

MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.5%, while Japan’s Nikkei stock index added 0.8%.

US stock futures tacked on 0.4%, while the euro also ticked up 0.2% to $1.1372, moving back toward a one-month high of $1.1440 hit on Thursday. The greenback was flat at 122.71 yen.

Athens is running out of cash to repay a 1.6 billion euro IMF loan due at the end of the month unless it secures new financing from international creditors.

Speculation is rife that, if no deal were reached on Monday, Greece may need to impose capital controls on Tuesday to avert a banking crisis as savers keep withdrawing funds from banks.

 

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