Greece’s cash-strapped government insisted it was “very close” to reaching a vital deal with bailout lenders.
However, the optimism in Athens was swiftly shot down by German finance minister Wolfgang Schaeuble.
Greece’s four-month-old government is days away from loan repayments to the International Monetary Fund it says it may not be able to honour.
Prime Minister Alexis Tsipras paid a rare visit to the finance ministry to announce that a breakthrough was in sight.
“We have taken very many steps. We are in the home stretch, close to the final agreement,” he told reporters.
The news buoyed markets, with the main Athens stock index closing up 3.6%, and other European markets also posting gains.