Lengthy Greek negotiations scare markets
GREEK socialist Evangelos Venizelos yesterday called for a unity government of the three largest parties in Greece to bring an end to the chaos following the indecisive general election over the weekend.
Stocks slid another 0.87 per cent to a fresh 20-year low and borrowing costs jumped again as worried investors continued to flee the troubled country – yields on 10-year bonds rose 0.56 percentage points to 23.692 per cent.
The former finance minister and PASOK party leader has three days starting today to form a government – though the left-wing Syriza party may block the plan as it opposes the Troika bailout, which Venizelos supports as a key factor keeping the country in the Eurozone.
The Communist party called for fresh elections.
Last night the European Financial Stability Facility (EFSF) revealed Greece will not receive all of the next tranche of its bailout funds until EU leaders decide if it is all needed – a decision made just a day after leading German politician Martin Schulz warned Greece that it must push on with fiscal reforms or face losing financial support.
The EFSF confirmed the release of €5.2bn (£4.17bn), €4.2bn of which will be given to the government to finance its debts.
The remaining €1bn of funds “are not needed before June and will be disbursed depending on the financing needs of Greece,” the EFSF said.
Under the terms of the bailout Greece had agreed to receive €39.4bn by the end of June.
Spanish and Portuguese leaders urged politicians to continue with the country’s tough austerity and economic reform package, to stay in the Eurozone.
“Let us be very clear, there is no economic growth without budget consolidation,” said Portuguese Prime Minister Passos Coelho, who described the Greek election result as “worrying.”