European markets drop awaiting Greek debt deal

Europe's main stock markets dropped and the euro fell versus the dollar Monday as investors waited to see whether Greece would strike a crucial debt deal. Indices were down after closing sharply higher on Friday in the wake of upbeat US jobs data. Early on Monday, the benchmark FTSE 100 index slipped 0.31 percent to 5,883.02 points, Frankfurt's DAX 30 lost 0.39 percent to 6,739.46 points and in Paris the CAC 40 retreated 0.99 percent to 3,394.06 points. The euro retreated to $1.3038 from $1.3156 on Friday. "Greece's finances remain the main focus of market concern and the weekend didn't appear to bring the much promised for resolution any closer, with still no real signs of an imminent agreement on the new 130 billion euro bailout that the country needs to avoid a default in March," said Michael Hewson, an analyst at CMC Markets. Greek Prime Minister Lucas Papademos faced more cliffhanger talks on Monday with European Union and IMF officials and coalition partners as a deadline for crucial debt relief drew closer. Papademos was to meet representatives from the EU, European Central Bank and International Monetary Fund and then receive heads of the Greek socialist, conservative, and far-right parties later, the premier's office said. Greece is trying to wrap up three weeks of tough negotiations to avoid a historic default in mid March that could disrupt the 17-nation eurozone and possibly hobble a global economic recovery. After five hours of talks on Sunday, Papademos noted agreement on a state savings target of 1.5 percent of gross domestic product that included the implementation of reforms to lower production costs and a scheme to recapitalise Greek banks.