The delay in extending emergency loans to Greece dragged down the value of shares on Europe’s stock markets on Monday.
Ratings agency Moody’s threatening to cut Italy’s credit rating also boosted fears that the problems of the euro zone’s peripheral countries would spread.
Analyst Robert Halver of Baader Bank in Frankfurt said the uncertainty is what is hitting the financial markets: “I guess there will be no situation right now to calm the markets. We need a solution right now to give the markets security in which way we can help the Greek government and the Greek people.”
Banks’ shares took a further hammering with investors fearing they will lose if Greece defaults on its loans.
Economists say they are certain that will happen – the question is how far will the effects spread?