A city expert has warned that the euro is “not out of the woods” after European leaders and the International Monetary Fund promised to contribute over €30bn of loans to ease Greece’s debts.

Phil McHugh, Senior Executive Dealer at Currencies Direct, said: “Although the agreement will help to calm the nerves of some investors, the solution reached over the weekend doesn’t provide a definitive trigger point on when Greece will take up the funding.

“The agreed loans from 16 European countries and the IMF are largely a way to appease the financial markets, though the EU will no doubt be hoping that Greece’s borrowing levels will come down on the news.

“If the loan is requested, there appears to be an immediate recipe for discontent as other financially strained EU countries including Portugal, Spain and Ireland will be contributing. This could be a crunch point for the eurozone as a whole.

“On top of this, Friday’s official data showed that Greek industrial production was down 9.2% in comparison with the previous year and inflation was up to 3.9% year on year in March.  This makes the current growth figures to reduce the deficit questionable. We have not yet seen the back of the Greece saga; it has simply been sidelined in the short term.”