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Europe: Stocks dip at open, before Greece vote

Wednesday, July 15, 2015 - 15:39
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[LONDON] Europe's main stock markets eased at the start of trading on Wednesday as Greece's parliament prepared for a key vote on its new bailout deal.

London's benchmark FTSE 100 index dipped 0.11 per cent to 6,746.01 points, as traders also reacted to Chinese economic data and awaited further clues for the outlook on US interest rates.

Frankfurt's DAX 30 nudged down 0.07 per cent to 11,508.34 points and the CAC 40 in Paris slipped 0.09 per cent to open at 5,027.91 points compared with Tuesday's close.

"Clearly the most important thing today is the Greek vote on the bailout plan and the passing of the proposed reforms needed to secure bridging loans that will enable the country to avoid default," said Craig Erlam, senior market analyst Oanda trading group.

Greece on Wednesday geared up for a parliamentary vote on draconian reforms demanded by eurozone creditors in exchange for a huge new bailout, in what could be Prime Minister Alexis Tsipras's toughest political test yet.

The crucial vote comes hours after the International Monetary Fund issued a stark warning that Greece would need far more debt relief to stop it crashing out of the common currency than European governments have so far been willing to contemplate.

The last-ditch deal struck Monday saw Tsipras agree to sweeping changes to labour laws, pensions, VAT and other taxes - many of which had been rejected by voters in a public referendum - in exchange for new funds to keep Greece's struggling economy afloat.

The parliament in Athens must approve the deal before the 18 other eurozone leaders start negotiations over what Greece is to get in return: a three-year bailout worth up to 86 billion euros, its third rescue programme in five years.

"This really is a hugely important but difficult vote that is effectively a choice between three more years of painful austerity or a potentially brutal and messy Greek exit from the eurozone," said Mr Erlam.

Europe's leading stock markets had risen the previous two days after the Greek deal had been reached in the early hours of Monday.

AFP