Tsipras speech spurs fire sales
February 9, 2015
Greek shares suffered another day of heavy losses on Monday, with the ATG share index plunging 5.3 percent in early trading. Investors feared that plans by Prime Minister Alexis Tsipras to reverse austerity measures imposed by Greece's bailout lenders would set the country on a course for an exit from the eurozone.
In his first major speech to parliament, Tsipras said on Sunday that his leftist-led government was "unshakeable" in pursuing its anti-austerity agenda. He said Greece intended to honor its debts, but added that a reversal of a series of reforms was certain.
His speech came after ratings agency Standard & Poor's on Friday downgraded the country's sovereign debt amid growing concern for the liquidity of Greece's cash-starved banks.
As a result of the ratings drop, bank shares suffered on Monday. The National Bank of Greece, Alpha Bank and Bank of Piraeus all lost between 7 and 10 percent of their share value.
Philippe Gijsels from BNP Paribas in Brussels told the Reuters news agency that comments by the Greek government "do not give the impression that the two sides are getting any closer."
Markus Huber, an analyst with Peregrine & Black also said the apparent stalemate "heightens the risk of a possible Greek default and exit out of the euro in just a few months."
Capital flight intensifies
Mounting uncertainty over Greece remaining in the eurozone is reportedly causing more and more Greeks to empty their accounts.
Quoting unnamed sources from the sector, conservative Greek daily Kathimerini reported Monday that the amount of money held by businesses and consumers in Greek banks had dwindled to a total of 147 billion euros ($166 billion), the lowest amount since the height of the Greek debt crisis in June 2012.
uhe/cjc (AFP, dpa)