German Chancellor Angela Merkel has said it is still possible for Greece to reach an agreement with its international creditors, striking a conciliatory tone ahead of a key meeting. But as David Pollard reports, some are also suggesting investors are too relaxed on ''Grexit'' risk.
The language is upbeat, even if the mood isn't. For German chancellor Angela Merkel not all is lost, yet. (SOUNDBITE) (German) GERMAN CHANCELLOR, ANGELA MERKEL, SAYING: "Where there is a will, there is also a way. If the political leaders in Greece have this will, a deal with the three institutions is still possible." But here, they're bracing for the worst. Athens top share index hit a fresh three-year low in early trading, extending a five-day losing streak. Bank stocks were the worst off - they dipped seventeen per cent. The market on red alert, says Merit Securities analyst Nikos Kafkas. (SOUNDBITE) (Greek) MERIT SECURITIES ANALYST, NIKOS KAFKAS, SAYING: "If the general index falls below 650 points, things will get really hard, selling could get out of control. and we are already close to that point." Elsewhere too there's growing alarm - some US fund managers now warning that investors are ''too relaxed'' on the risk of a Grexit. But there appeared to be little hope a deal would be struck at the day's meeting of euro zone finance ministers in Luxembourg. And - Merkel aside - the rhetoric of conflict builds. Greek prime minister Alexis Tsipras denouncing the creditors' ''blind insistence'' on cutting Greek pensions as making the crisis worse. Here in the Bundestag, left-wingers are still ready to show their support for Athens. But across Germany, a majority now want Greece out of the euro zone, according to a poll. There is still hope that won't happen, says Justin Urquhart-Stewart of Seven Investment Management. SOUNDBITE (ENGLISH) SEVEN INVESTMENT MANAGEMENT, MARKET ANALYST, JUSTIN URQUHART-STEWART, SAYING: ''We're going to end up with a euro-fudge. That's what normally happens. It's not worth actually having Greece kicked out of the euro zone. Financially, it's actually not that important - there are other larger issues, such as the French economy, to try and fix.'' Greece has to make a 1.6 billion euro repayment to the IMF by June 30. But before that, euro zone leaders meet on the 25th - for what could the next last chance of salvaging a deal.