Euro stocks hit by Greek loan indecision - Europe Report

GREEK shares fell and pan-European indexes slipped yesterday as investors tempered their expectations that Eurozone finance ministers meeting in Brussels would find common ground with Greece’s new government.

The currency bloc’s finance ministers were meeting in Brussels to discuss what the Greek government, elected last month on promises of ending austerity and onerous credit terms, is going to do to continue to get more loans from the Eurozone.

But with a deadline looming in the form of the expiry of the current funding package on 28 February, there was little optimism among those who took part in preparatory talks since Friday. After markets closed, talks broke down.

The FTSEurofirst 300 index of top European shares was down 0.2 per cent at 1,500.36 points, just below a seven-year high hit during the session on Friday. Greek shares were down 3.8 per cent and Greek banks were down 11.5 per cent.

The European Central Bank has authorised emergency funding, known as Emergency Liquidity Assistance, for Greek banks but will review its policy tomorrow in the light of the Brussels talks.

Uncertainty over Greece’s future and a military conflict in Ukraine were major risks looming over a economic recovery in the Eurozone, according to UBS strategists.

Germany’s Dax, which hit a record high on Friday, was down 0.4 per cent.

Athens’ volatile stock index fell 3.8 per cent, having risen 5.6 per cent on Friday, but was still at levels hit before the 25 January election.