Greek stocks plunge for third day over political uncertainty

GMT 21:09 2014 Thursday ,11 December

Arab Today, arab today Greek stocks plunge for third day over political uncertainty

The Athens general index
Athens - AFP

Greek stocks plunged Thursday for a third straight day as the prime minister urged deputies to elect a new president next week and safeguard the country's fragile economic recovery.
The Athens general index closed 7.35 percent down, with the top banks losing 5.29 and 13.89 percent.
Anxiety over Greece's immediate political future has risen after the government unexpectedly brought forward to next week a high-stakes presidential vote that could result in early general elections if its candidate fails.
As the stock market fall gathered steam around midday, Prime Minister Antonis Samaras tried to rally his conservative MPs for the presidential vote.
"All deputies must decide whether we will have a president, or early elections," Samaras said.
"(Elections) which society does not want, which the economy cannot bear, and which markets fear," he said.
The parliamentary vote to replace President Karolos Papoulias had been due in February but will now begin on December 17.
The candidate needs to win over two-thirds of the lawmakers to be elected or a second vote will be held on December 23. If needed a final ballot needing only 180 votes will be held on the 29th.
The manouevre could save or break embattled Samaras, who is obliged under the constitution to call snap general elections if his candidate -- former EU Environment Commissioner Stavros Dimas -- fails to garner enough support.
The PM has a narrow majority of 155 seats, and his candidate is therefore unlikely to secure an outright win in the first round.
- EU applauds move -
In a rare move, the European Commission applauded Samaras' decision to bring the vote forward.
"The decision can help remove uncertainties around markets, it is a strong signal to Europe that Prime Minister Samaras put forward his candidate Stavros Dimas, a former commissioner and a convinced European," said EU commission spokesperson Annika Breidthardt.
EU Economic Affairs Commissioner Pierre Moscovici also said he would travel to Greece on the eve of the first vote to lend support.
The International Monetary Fund, which has also contributed to the 240-billion-euro ($295-billion) bailout package, was more measured, saying Thursday it would go ahead with its regular review of the aid programme whatever happens in the vote.
Analysts have warned that the political uncertainty could stall Greece's fiscal reforms required under the bailout programme.
Thursday's bourse fall followed a record 12.78 percent plunge on Tuesday -- the biggest one-day drop in nearly three decades -- and a fall of just over one percent on Wednesday.
Meanwhile, the yield of Greek ten-year government bonds climbed to 9.1 percent from 7.24 percent on Monday.
Samaras has said the election was brought forward to eliminate political uncertainty later.
On Thursday, he added that early general elections could bring "turmoil."
"Markets in Greece and abroad ... are afraid that if a president is not elected and the country is led to early elections, there will be general turmoil," Samaras warned.
The radical leftist party Syriza holds a steady lead in opinion polls over Samaras' conservative New Democracy party.
Syriza leader Alexis Tsipras, a 40-year-old former Communist, has pledged to raise wages and pensions, halt privatisations and re-negotiate Greece's bailout agreement with the EU-IMF creditors.
Samaras said a Syriza victory would be "disastrous" for the country.
"Foreign investors are horrified by Syriza's electoral programme," the PM said.
In turn, Syriza said Samaras was trying to "terrorise" Greek society.
Greece is creeping gingerly out of a debilitating recession that lasted six years and which left about a fifth of the population unemployed.
Tensions are still running high with many Greeks fed up with years of austerity, and Athens remains locked in negotiations with its creditors for the final tranche of EU aid funds.
In 2012, back-to-back elections were needed in May and June to form a shaky coalition government under Samaras, stalling Greece's fiscal reforms and sparking speculation that the country was about to be ejected from the euro.


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