Negotiations between Greece and its international lenders over reforms to unlock remaining bailout aid have made headway and an agreement could be closer this month, a government official said on Sunday.
Most top credit rating agencies say they would not cut Greece's rating to default if it misses a payment to the International Monetary Fund or European Central Bank, a stance that could keep vital ECB funding flowing into the financial system.
World stock markets and the dollar remained in a sharp sell-off mode on Thursday, having been jolted sharply lower by weak U.S. growth data and cautious comments from the Federal Reserve.
Euro zone officials sought to wring policy concessions from Greece on Wednesday to unlock urgently needed aid after Athens said it would present a list of reforms for legislation to show it is serious about implementing its promises.
If fear of Europe-wide financial wildfire was Athens' trump card in its standoff with euro zone creditors - then the card has now turned up a dud.
Around half of investors expect Greece to leave the euro zone within the next 12 months, a survey by German research group Sentix showed on Tuesday.
Greek Prime Minister Alexis Tsipras on Monday reshuffled his team handling talks with European and IMF lenders, a move widely seen as an effort to sideline embattled Finance Minister Yanis Varoufakis to a less active role in negotiations.
World shares hit a new high on Monday, led by China, though the global rally faded in Europe as investors looked ahead to central bank meetings in the United States and worried over Greece.
Greek Prime Minister Alexis Tsipras and German Chancellor Angela Merkel agreed in a phone conversation on Sunday to maintain contact during talks between Athens and its lenders to reach a debt deal, a Greek government official said.
"We're going bust." "No, you're not." "You're strangling us." "No we're not." "You owe us for World War Two." "We gave already."
German Finance Minister Wolfgang Schaeuble hinted on Saturday that Berlin was preparing for a possible Greek default, drawing a parallel with the secrecy of German reunification plans in 1989.
UBS's (UBSG.VX) chairman said a default by Greece is seen by the International Monetary Fund as "systemically controllable" and he believed it would have a negligible impact on the Swiss bank itself, according to a newspaper interview published on Saturday.
Greek Foreign Minister Nikos Kotzias said on Friday he respects Germany just not German politics, nor the way Berlin views Greece's economy, which faces the prospect of running out of money if it cannot agree to new bailout terms with creditors.
Greece offered some concessions on Friday on reforms demanded by international lenders in return for new funding before Athens runs out of money, but euro zone creditors said negotiations needed to speed up to get a deal by June.
Global equity markets rode to new all-time highs on Friday, with positive corporate updates in Europe and a post-dotcom-boom peak for the U.S. Nasdaq stoking investor optimism.
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