Europe seen higher on Greek debt plan

European equities are expected to open higher after Greece's finance minister unveiled a new debt deal that avoids the need for a haircut, an unpopular concept in Germany.

Greece's Finance Minister Yanis Varoufakis unveiled proposals on Monday to end the confrontation with its creditors by swapping outstanding debt for new growth-linked bonds, running a permanent budget surplus and targeting wealthy tax-evaders, the Financial Times reported late Monday.

Meanwhile, the country's finance minister continues its charm offensive around Europe to drum up support for a new debt deal. On Tuesday, Varoufakis is due to meet with Italian Finance Minister Pier Carlo Padoan in Rome.

After meeting U.K. Chancellor George Osborne on Monday, Osborne told reporters that the debt dispute between the Greek government and the euro zone was fast becoming the biggest risk to the global economy, Reuters reported.

In other news, the Reserve Bank of Australia cut rates on Tuesday for the first time since August 2013 as it attempts to support an economy hit by falling commodity prices.

Asian stock markets traded mixed on Tuesday, as a rebound in crude oil prices brought mixed blessings, while the largely anticipated rate cut from the RBA lifted Australian equities to near seven-year highs.

Earnings are due from Danske Bank, Rosneft, Banco Santander, Aberdeen Asset Management, BP, TalkTalk, Shire and Ocado. Data releases Tuesday include Italian inflation and the U.K. construction PMI for January.