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Greek default fallout fears spark European slump

Greek default fallout fears spark European slump
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European markets slumped for a second day amongst mounting speculation Germany is perparing for Greece to default.

French Banks BNP, Societe Gererale and Credit Agricole slild more than nine per cent. Rumours increased Moody’s may cut their credit ratings because of their Greek holdings.

Insurers posted the biggest losses among 19 industry groups on the Stoxx Europe 600 index.

“We’ve been waiting for a long time for a solution to finally stop the Greek financial haemorrhage. So long as there is not a long and durable solution, the markets will imagine a scenario where we’re all headed into the wall: the explosion of the euro zone,” said Montsegur Finance’s François Chaulet.

The euro suffered, hitting a 10 year low against the yen and a 7 month low against the dollar. Germany will decide on a course of action after receiving the results of a Greek progress report according to a government spokesman.