Signs that a deal could be at hand to stave off a Greek default lifted global shares and cut borrowing costs for euro zone countries seen as most vulnerable to the protracted crisis. But as Sonia Legg reports, the deal isn't done yet.
Greece's ATG share index rose again - more than four percent - after a nine percent rise on Monday. European shares climbed too - to a three-week high, after another rally in Asia. It was largely down to encouraging comments from euro zone leaders about Greece's new budget proposals. They've been called a "basis for possible agreement" to unlock aid and avert a looming default. But BGC's market strategist Mike Ingram isn't convinced the numbers add up. (SOUNDBITE): Mike Ingram, Market Strategist, BGC Partners, saying (English): "You are still getting the creditors demanding a ramping up in primary surplus generated by Greece to 3 - 3 1/2 percent of GDP over the next three to four years. I'm not sure how doable that is? You need to bear in mind that even before Syriza came in, the previous government had also failed to meet last year's fiscal targets by quite a considerable margin" The proposals include higher taxes and welfare charges and steps to limit early retirement. But pensions and wages won't be cut - meaning Greece's Prime Minister hasn't rubbed out any promised anti-austerity red lines (SOUNDBITE) (Greek) GREEK PRIME MINISTER, ALEXIS TSIPRAS, SAYING BEFORE LEAVING: "After all this I now have the feeling, to use a phrase usually used by EU officials, the ball is in the European leaders' court" Euro zone leaders were unable to sign off on the deal because Greece initially submitted the wrong proposals causing a delay. It'll now be scrutinised over the next two days in the hope that leaders can sign it off at a scheduled meeting on Thursday. But even if they do there are many concerns. Most of the bailout money will end up being paid back to the lenders themselves - it won't do much for growth or Greece's crippling debt problem, a fact acknowledged by IMF chief Christine Lagarde. (SOUNDBITE) (French) INTERNATIONAL MONETARY FUND MANAGING DIRECTOR, CHRISTINE LAGARDE, SAYING "An enormous amount of work remains to be done. This is certainly not the end of the road." Greeks weren't getting excited either and some lawmakers in Athens were far from happy - warning the proposals might be rejected. The newspapers reflected the many views "Towards a painful compromise!" read one headline, "Bailout shock" said another. One at least suggested progress of sorts calling the new deal simply a "Passport to an Agreement."