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Greek debt drama heightens contagion fears

Greek debt drama heightens contagion fears
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Most European markets ended the day in negative territory but higher than the depths of the morning.

Stocks were lifted around lunchtime as rumours abound of a last-ditch deal between Greece and its creditors.

France’s CAC40 dropped 79.6 points to end at 4.79,Britain’s FTSE lost 1.50 while the Dax in Germany fell 1.23 percent.

Meanwhile across the pond, Wall Street opened cautiously after yesterday’s losses.

Our business correspondent Sasha Vakulina spoke about the latest developments with Angus Campbell, senior analyst at FxPro.

Sasha Vakulina, euronews: Angus, the US stocks fell sharply on Monday, today European markets rebounded from their worst levels. What’s been happening?

AC: “Yes, the markets are just taking things one step at a time… We have seen a great deal of risk aversion, let’s not underestimate just how worried investors are. There has been a sharp correction in stock indexes around the globe, there has been a spike in borrowing costs for some of those peripheral nations in the eurozone, that investors are worried may suffer from contagion if things in Greece worsen. And we just take things as I say – each day one step at a time.”

euronews: The banks in Greece are closed this week. Will they open next week and what happens if not?

AC: “Polls have suggested that the majority of Greek people do want to stay in the single currency, but at the same time, the current Prime Minister, who called for this election, he is campaigning for the people to vote “no”. And if that is the result of the referendum on Sunday, then we could see a very serious financial turmoil. Within the markets it could have serious effect in term of risk aversion and I think the banks will remain closed for some time with even more severe capital controls imposed.”