Stock markets around the world fell on Monday as concerns about Greece’s finances led to contagion.
The losses were broad across risk assets. Major stock indexes fell sharply, as did crude oil prices, while the euro weakened against the dollar. Gold and silver rose on the day.
Some analysts say the bailout negotiations are being treated like a political football.
Timos Melissaris, fund manager and economist said:
“The (bailout) programme is ending which means that the ECB, if we haven’t a deal, they will stop the ELA (Emergency Liquidity Assistance) mechanism, basically the funding to the Greek banks. So that’s why the 30th of June is the deadline. Until then, it’s all political blame.”
The latests round of talks between Greece and its creditors broke up on Sunday after less than hour with both sides blaming the other for not making any concessions. Greece needs to repay 1.6 billion euros to the International Monetary Fund by the end of this month.
Many in Athens believe the fault lies with Europe.
“They put a lot of pressure on us, a lot of pressure. We have austerity. How much more austerity can there be in Greece? The European Union needs to lower its demands,” said one man.
Sentiments shared by others:“It’s a mess. It can’t be fixed, because with this government we cannot find a solution. They keep saying different things, they come and go [the talks], they fight, they quarrel. Where will this take us?”
Greece has already been bailed out twice and many banks have cut their exposure to the country.
Euro zone authorities have put in place mechanisms to limit contagion, however the prospect of default and Athens leaving the euro may test those measures in the coming days to the max.