LONDON (TheDeal) -- European equities investors felt the impact of a sharp selloff of government bonds, and took a "glass-half-empty" view of glimpses of progress on the Greek crisis, with stock indices trading sharply lower on Thursday.

After an inconclusive meeting yesterday, Greek Prime Minister Alexis Tsipras said a debt deal was "within sight" as he prepared for yet another meeting with euro-dignitaries.

Greece's international creditors have reportedly submitted a plan that would require Greece to run a primary budget -- revenues minus expenses excluding debt interest -- surplus of 1% this year, rising to 2% next year, 3% in 2017 and 3.5% in 2018. The creditors hope that a deal can be reached by June 11, said the Financial Times. A €305 million ($346.2 million) payment by Greece to the International Monetary Fund falls due on Friday.

Meanwhile, bond investors remained spooked by comments from European Central Bank President Mario Draghi yesterday that they'd just have to get used to increased volatility.

Euro-area indices posted the steepest losses, with the DAX in Frankfurt down 1.54% at 11,243.93, the CAC 40 in Paris down 2.00% at 4,933.91, and the Athens Composite index down 2.18%.

In London, the FTSE 100 fell 1.50% to 6,846.36.

The yield on the German 10-year bund was up 5 basis points at 0.93%.

Deutsche Telekom (DTEGY) rose in Frankfurt after The Wall Street Journal reported that Dish Network (DISH) is close to a deal to merge with the Bonn telecom's majority-owned T-Mobile (TMUS) of Bellvue, Wash. The Journal said the companies had already agreed to put the T-Mobile CEO at the helm of the new entity, while Dish founder Charlie Ergen would be chairman.

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