Greek shares, bonds slump on default concerns
Main fear is that Merkel is losing patience with debt negotiations which have so far failed
London
FEARS that Greece will default on its debt in coming weeks caused a major Greek share and bond slump and a slide on other European markets. Such is the concern that on Monday the Greek stock market plunged by 7 per cent, before recovering slightly so that in two days' trading the market is down by 12 per cent. Since depositors have been fleeing banks on fears that it is only a matter of time before Greece leaves the euro and re-establishes a much devalued drachma, shares of Piraeus Bank plunged by 18.5 per cent on Monday, Eurobank Ergasius by 13.8 per cent and National Bank of Greece by 13.4 per cent. Two-year Greek bonds are on yields of 28.3 per cent, five-year bonds 17.4 per cent and 10-year bonds 11.7 per cent.
The fear is that German Chancellor Angela Merkel, who has been the main mover to keep Greece in the eurozone, is losing patience with debt negotiations which have so far failed. A key warning is Vice-Chancellor Sigmar Gabriel's Sunday article in Germany's Bild tabloid newspaper.
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