Greece fails to form government
Source: Agencies |
May 16, 2012, Wednesday
|
Print Edition
Print Edition
Attempts to form a government in Greece collapsed yesterday, jolting financial markets at the prospect leftists opposed to the terms of a European Union bailout could sweep to victory in a June election and nudge the eurozone crisis into a dangerous new phase.
The turmoil in Athens sent waves around other troubled members of the 17-nation European single currency area. The euro slipped below US$1.28 while Spanish and Italian bond yields rose above the danger level of 6 percent as investors scurried for shelter in safe haven German Bunds.
The tremors from Greece, compounding worries about Spain's debt-laden banking system, ended any honeymoon for new French President Francois Hollande, thrusting the growing risks to the eurozone to the top of the agenda for his first meeting with German Chancellor Angela Merkel.
In Athens, a spokesman for President Karolos Papoulias said his efforts to broker a compromise on a cabinet of technocrats to steer the country away from bankruptcy had failed. A caretaker government will now be formed pending a new vote, probably in mid-June.
"For God's sake, let's move towards something better and not something worse," Socialist leader Evangelos Venizelos told reporters after party leaders met the head of state.
Eurozone finance ministers dismissed talk of Greece leaving the single currency area as "propaganda and nonsense" on Monday. But with hostility to EU/IMF-imposed austerity rising in Greece, speculation about a possible exit is rattling financial markets.
The left-wing Syriza party, which surged to second place in last week's election on an anti-austerity platform, rejected all compromise with pro-bailout parties, emboldened by opinion polls showing it could top a second vote.
EU officials are hoping Hollande's election will revive proposals for solutions to the debt crisis such as issuing joint eurozone bonds, which Merkel has so far blocked.
Markets and policy-makers are watching the dialogue between the German chancellor and the French leader for signs that they can overcome their differences on Merkel's drive for austerity and lead the eurozone together.
Merkel and former French President Nicolas Sarkozy had dominated eurozone crisis management since the debt turmoil began in late 2009, earning the nickname "Merkozy" for their sometimes disputed leadership.
Her relationship with Hollande, which one French pundit has already dubbed "Homer" perhaps due to its Greek challenge, may initially be cool as they are from opposing political families.
Surprisingly strong first quarter growth figures for Germany relieved pressure on shares and the single currency yesterday, but worries about the deepening impact of the euro crisis and a possible Greek exit kept demand for safe-haven assets strong.
The turmoil in Athens sent waves around other troubled members of the 17-nation European single currency area. The euro slipped below US$1.28 while Spanish and Italian bond yields rose above the danger level of 6 percent as investors scurried for shelter in safe haven German Bunds.
The tremors from Greece, compounding worries about Spain's debt-laden banking system, ended any honeymoon for new French President Francois Hollande, thrusting the growing risks to the eurozone to the top of the agenda for his first meeting with German Chancellor Angela Merkel.
In Athens, a spokesman for President Karolos Papoulias said his efforts to broker a compromise on a cabinet of technocrats to steer the country away from bankruptcy had failed. A caretaker government will now be formed pending a new vote, probably in mid-June.
"For God's sake, let's move towards something better and not something worse," Socialist leader Evangelos Venizelos told reporters after party leaders met the head of state.
Eurozone finance ministers dismissed talk of Greece leaving the single currency area as "propaganda and nonsense" on Monday. But with hostility to EU/IMF-imposed austerity rising in Greece, speculation about a possible exit is rattling financial markets.
The left-wing Syriza party, which surged to second place in last week's election on an anti-austerity platform, rejected all compromise with pro-bailout parties, emboldened by opinion polls showing it could top a second vote.
EU officials are hoping Hollande's election will revive proposals for solutions to the debt crisis such as issuing joint eurozone bonds, which Merkel has so far blocked.
Markets and policy-makers are watching the dialogue between the German chancellor and the French leader for signs that they can overcome their differences on Merkel's drive for austerity and lead the eurozone together.
Merkel and former French President Nicolas Sarkozy had dominated eurozone crisis management since the debt turmoil began in late 2009, earning the nickname "Merkozy" for their sometimes disputed leadership.
Her relationship with Hollande, which one French pundit has already dubbed "Homer" perhaps due to its Greek challenge, may initially be cool as they are from opposing political families.
Surprisingly strong first quarter growth figures for Germany relieved pressure on shares and the single currency yesterday, but worries about the deepening impact of the euro crisis and a possible Greek exit kept demand for safe-haven assets strong.
- About Us
- |
- Terms of Use
- |
-
RSS - |
- Privacy Policy
- |
- Contact Us
- |
- Shanghai Call Center: 962288
- |
- Tip-off hotline: 52920043
- 沪ICP证：沪ICP备05050403号-1
- |
- 互联网新闻信息服务许可证：31120180004
- |
- 网络视听许可证：0909346
- |
- 广播电视节目制作许可证：沪字第354号
- |
- 增值电信业务经营许可证：沪B2-20120012
Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.
