20.02.2012

By Simon Miller

Markets have opened up this morning amid cautious optimism that eurozone leaders will agree the rescue package for Greece.

Last week ended with heavy suggestions that Germany was drawing up plans for a controlled default by the stricken Mediterranean country which is now facing daily clashes in Athens over its planned austerity cuts.

In addition to the protests,a report from the 'troika' of the European Commission, European Central Bank and the International Monetary Fund said that even with these cuts Greece would fail to reach its target debt of 120% by 2020,

According to newspapers, German finance minister Wolfgang Schäuble believed that no Greek government would be able to fully implement cuts.

However, it appears that Germany has, at least, turned down the rhetoric, apparently bowing to international pressure over its stance.

Over the weekend, Schäuble signalled that the pension cuts agreed by the Greek cabinet would be enough to get the bailout package approved at the eurogroup meeting at around 14.00GMT today.

"If Greece can implement all the necessary promises by the end of February and clear up any other open questions, the second aid package can be approved," Schäuble told reporters.

As a result, markets were up with the FTSE 100 nearing the 6,000 mark at 5,954.06 (up 48.99) as of 09.51GMT while Euro Stoxx 50 was up 26.36 at 2,546.67 and the CAC 40 at 3,472.77, up 33.15.