The unexpected announcement by Greek Prime Minister George Papandreou calling for a referendum on the agreement reached between European leaders last week to solve the sovereign debt crisis has sent shock waves which have plunged the Dow by more than 297 points, or 2.05%, to 11,657.96 on Tuesday. Most European indebted nations are not happy with the economic belt tightening that would be required if the above agreement is implemented.
Having lost 2.5% on Monday, stocks extended their losses to Tuesday with the result that in the last two days, U.S. stocks have gone down by 4.7%. Tuesday also saw major European Indexes like France’s CAC 40 and Germany’s DAX tumbling 5% or more.
Charles Crane of Douglass Winthrop Advisors said, “If Greece thumbs its nose at the rest of the EU over this bailout, we go back to where we were before last week’s euphoria. It’s pretty darn disruptive, but could it get worse? Yes.”
Fitch Ratings said that investors are now apprehensive of the increasing threat of the Greek debt crisis getting much worse. It also feels that a referendum will only raise the possibility of a “disorderly” Greek default. Investors are not happy that the seemingly quick-fix solution found by European leaders might not be enough or immediate in solving the sovereign debt crisis.
Michael Farr of Farr Miller & Washington said, “These problems were a long time in the making and will take a long time to mend.”
Read more : Greek Referendum On Bailout Sends Shock Waves Across Markets
Having lost 2.5% on Monday, stocks extended their losses to Tuesday with the result that in the last two days, U.S. stocks have gone down by 4.7%. Tuesday also saw major European Indexes like France’s CAC 40 and Germany’s DAX tumbling 5% or more.
Charles Crane of Douglass Winthrop Advisors said, “If Greece thumbs its nose at the rest of the EU over this bailout, we go back to where we were before last week’s euphoria. It’s pretty darn disruptive, but could it get worse? Yes.”
Fitch Ratings said that investors are now apprehensive of the increasing threat of the Greek debt crisis getting much worse. It also feels that a referendum will only raise the possibility of a “disorderly” Greek default. Investors are not happy that the seemingly quick-fix solution found by European leaders might not be enough or immediate in solving the sovereign debt crisis.
Michael Farr of Farr Miller & Washington said, “These problems were a long time in the making and will take a long time to mend.”
Read more : Greek Referendum On Bailout Sends Shock Waves Across Markets
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