European shares higher on hopes for Greek deal

The euro was at eight-week high and European shares rose on Wednesday on hopes that a deal on a second bailout for Greece was close, shrugging off data illustrating the damage the debt crisis has done to the region's economy.

Germany saw the steepest drop in exports for nearly three years in December and the Bank of France said its economy would not grow at all in the first quarter of 2012.

But riskier assets were boosted by optimism that more talks due to be held in Athens today will eventually lead to a deal that releases the funds needed to avoid a messy Greek debt default, which could happen as soon as next month.

The euro traded around $1.3260, having earlier briefly hit a fresh 2-month high of $1.3283.

The MSCI world equity index, which has gained 9.2 per cent this year, was up 0.3 per cent and European shares also opened about 0.3 per cent higher at 1075.56.