European shares close near seven-year peak on optimism over Greece
* FTSEurofirst 300 index ends 0.8 percent higher
* Greek shares up 11.3 pct, biggest 1-day gain since 2011
* Germany's DAX share index hits new record high
* Santander, BP shares rise after results
By Atul Prakash
LONDON, Feb 3 (Reuters) - European shares closed near a seven-year high on Tuesday and Greek banking stocks soared after the country's new government softened calls for writing down its debt.
Athens proposed ending a standoff with its creditors by swapping the debt for growth-linked bonds. The proposals contrast with the government's strident vows last week to ditch the austerity conditions imposed under its existing bailout.
Athens' benchmark index ATG ended 11.3 percent higher, the biggest one-day percentage gain since August 2011. The country's banking index surged nearly 18 percent. National Bank of Greece, Alpha Bank and Eurobank rose by 13.9 to 20.8 percent.
"Greek banks have massive potential to recover, because if you get a debt deal and Greek banks get some help, then they can reinforce their balance sheets and carry on trading," Edmund Shing, global equity fund manager at BCS Asset Management, said. Continuación...