Mildly positive; deal yet to be reached, Greek banks remain under high pressure

Following Greece's submission of updated proposals over the weekend, today's expected crucial day for Greece turned out to be mildly positive, but inconclusive. The Eurogroup and European leaders took stock of further progress in the negotiations, but called for a technical examination of the proposals. Still, it seems that a further programme extension (of the current second bailout) is on the table and could be agreed by the end of this week. The Eurogroup is scheduled to meet again on Wednesday evening.

Although news from programme negotiations was mildly positive, cautious on the eventual outcome as the situation remains very tense, particularly with respect to the banking sector. Bloomberg reported that the ECB's Governing Council on Tuesday will again review the ELA ceiling, which now stands at €87.8bn, up from €84.1bn last Wednesday. 

The ECB will remain supportive of Greek banks, which face increasing deposit outflows (€1.6bn on Monday after €2bn on Friday according to the FT), particularly as the prospect of a deal has somewhat improved over the past couple of days. Nonetheless, the FT mentions that finance ministers had a discussion as to whether capital controls should be imposed, but no decision was taken.