Reports that Greece has buckled to European debt demands boost stocks

Alexis Tsipras is fighting to keep his job, and to keep Greece in Europe — (Image credit: Milos Bicanski/Getty Images)

Greece effectively defaulted on its debt obligations at midnight Wednesday, skipping a $1.7 billion payment to the International Monetary Fund. But the Financial Times reports that Greek Prime Minister Alexis Tsipras, in a letter to Greece's creditors, has now agreed to European conditions for a new bailout, with just minor modifications. Greek national broadcaster ERT is reporting a similar capitulation.

The reports were enough to send European stocks sharply higher early Wednesday, and bond yields dropped in Greece's southern European neighbors Italy and Spain. Tsipras had previously rejected the demands from the European Central Bank and eurozone finance ministers, defiantly scheduling a July 5 referendum.

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Peter has worked as a news and culture writer and editor at The Week since the site's launch in 2008. He covers politics, world affairs, religion and cultural currents. His journalism career began as a copy editor at a financial newswire and has included editorial positions at The New York Times Magazine, Facts on File, and Oregon State University.