Greek central banker optimistic on chances of debt deal

LONDON (Reuters) - The chances of Greece doing a deal with its European creditors have grown since a meeting in Berlin this week, Greek central bank governor Yannis Stournaras said on Wednesday, adding that an exit from the euro would only bring his country more pain. Speaking to a packed hall at the London School of Economics, Stournaras also said the European Central Bank's latest increase in emergency funding for Greek banks showed that their situation going forward was stable. He laid out a list of improvements in Greece's economic situation over the past year and said that, provided it could cut a deal with its creditors, growth would continue to improve in 2016. But he warned against the idea of Greece leaving the euro - 'Grexit' - and said he was confident this would not happen. "Grexit would deliver no benefit but a lot of pain," he said. Financial markets remain on edge over whether Greece, after six years of economic torment and the election of the Syriza government, will come to terms with Germany and other euro zone leaders over a new version of its international bailout. Stournaras said the body language of Greek Prime Minister Alexis Tsipras after his meeting with Germany's Angela Merkel on Monday was "the right one" and that relations between the two sides in the negotiations had improved. The key challenge for Greece is to deliver a convincing list of reforms it has promised to its euro zone partners in return for a new deal on aid, he said. "I can say I’m more optimistic now than I used to be, say a month ago. The last meetings and the high level meeting last week has given us hope that the government is serious (about) implementing the structural reforms," Stournaras said. (Reporting by Alistair Smout and Patrick Graham; Editing by Gareth Jones)