Athens : Greece’s stock market plunged over 22 per cent as it reopened today after a five-week closure, giving investors their first opportunity since late June to react to the country’s latest economic crisis.
Bank shares suffered most, hitting or nearing the daily trading limit of a 30 per cent loss. Markets in the rest of Europe, however, were largely unaffected.
The stock market and banks were closed on June 29, when the government put limits on money withdrawals and transfers to keep a run on the banks from bringing down the financial system. Greeks were panicking over the prospect that the country could fall out of the euro after its talks creditors broke down. Greece has since then resumed talks with creditors and reopened its banks. Strict limits on cash withdrawals remain, however.
Greece is currently in intense negotiations with bailout lenders to negotiate the terms of a massive new rescue package in the next two weeks. The country needs to complete the talks and get more loans before August 20, when it has to repay more than 3 billion euros to the European Central Bank. Prime Minister Alexis Tsipras is facing opposition to the new bailout from within his left-wing Syriza party that could force him to call an early election in the fall. Syriza dissenters are openly calling for a return to the drachma, but failed last week to force an emergency party conference before the bailout negotiations are completed.
