European stocks rallied on the news that Greece has started crafting an agreement with its international bailout supervisors.
Greece and its bailout supervisors will start writing a "staff level agreement" on Wednesday, sources close to the talks said. This comes after months of battling between Greece far-left government and officials over an aid-for reforms deal.
The sources said the agreement would involve no cuts to Greek wages or pensions, which had been a sticking point in negotiations.
According to the sources, differences between the European institutions (the European Central Bank and the European Commission) and the International Monetary Fund were holding up a deal.
"If the agreement of the IMF was not required, we now have closed the deal," said the source.
Commenting on the news, Peter Boockvar, chief market analyst at The Lindsey Group, said: "The deadline we know is fast approaching and the assumption will be another can-kick deal.
"If there is none and Greece defaults, I honestly don't know what the full repercussions will be at this point, as Greece is a political problem, not an economic one for the euro region."
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