- Title: FRANCE: Greek worries drive European shares down sharply at opening
- Date: 17th May 2012
- Summary: PARIS, FRANCE (MAY 16, 2012) (REUTERS) TRADERS AT DESKS AT MONTSEGUR FINANCE, A PARIS-BASED ASSET MANAGER
- Embargoed: 1st June 2012 13:00
- Location: France
- Country: France
- Topics: International Relations,Economy,Politics
- Reuters ID: LVA4S4AKI5RVNGTSL6COGP6FNRL4
- Aspect Ratio:
- Story Text: European shares fell on Wednesday (May 16), in a broad-based sell-off, as concerns around Greece's political and financial crisis sapped risk appetite and strategists advised investors to buy defensive stocks.
The FTSEurofirst 300 index fell 0.6 percent to 991.50 by 0828 GMT, having dropped 0.7 percent on Tuesday after Greek politicians failed to put together a ruling coalition, paving the way for a new election and ramping up concern over what would happen if it leaves the euro zone.
Meanwhile, Spain's IBEX 35 and Italy's FTSE MIB suffered respective losses of 0.6 percent and 0.2 percent, on contagion fears.
Asset manager at Paris-based firm Montsegur Finance, Francois Chaulet, believes that given the comparative size of the Greek economy, saving it is a question of political will.
"It was said yesterday that we need to lend a helping hand to the Greek economy. That means showing that the euro zone is able, if there is the will in Greece to stay in the euro zone and to respect the undertakings they've given, that a strong Europe is able to come to the aid of a country which -- we mustn't forget -- generates annually two percent of the wealth in Europe. And to show that we have the funds today to come to the aid of the Greek economy, but they have to show that they will stick to the terms they've agreed," Chaulet told Reuters.
He said that markets are unsure about if the growth-promoting measures which saw new French President Francois Hollande elected will be agreed by his European partners.
"As far as France is concerned, the markets are waiting to see which of the measures announced in the electoral programme will be passed, notably tax measures for businesses as well as households. And as far as Europe is concerned, they are waiting to see which measures will be among those proposed and accepted by all of the parties, those which will be Keynesian growth measures, i.e. ones including new expenditure, which is a route which has not been accepted up until today by Germany," he said.
Hollande's first presidential trip after assuming office was to Berlin and his meeting with German Chancellor Angela Merkel was being closely watched for signs the leaders of Europe's biggest economies will be able to move beyond a war of words over how to resolve the debt crisis that now threatens to tear apart the 13-year-old currency bloc.
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