Greece stock market faces more losses as prospect of new elections grows

Greece stock market faces more losses as prospect of new elections grows

The Greek stock market has suffered a second day of losses since reopening, as the left-wing government conceded dissent within the ruling party was likely to force an early election.

The main index was down 4% soon after the start of trading on Tuesday, with some banks again hitting the 30% lower trading limit. Shares plummeted 16.2% on Monday, when it reopened after a five-week closure.

The plunge comes as Greece reels from the impact of limits on money withdrawals and transfers imposed on June 29 to avoid a banking collapse as well as uncertainty over its negotiations for a new bailout and the stability of its government.

The government is relying on opposition party support for approval of new austerity measures demanded by bailout lenders, following a revolt by nearly one fourth of its own lawmakers.

Government spokeswoman Olga Gerovasili said the government would not form a national unity government and described early elections as “likely”.

“A solution will be found, since the country needs a strong government,” Ms Gerovasili said. “(Early) elections are likely but that doesn’t mean we will be dealing today with when they will take place.”

Panagiotis Lafazanis, a prominent dissenter and lawmaker of the ruling Syriza party, urged colleagues to join him in voting against the government when the bailout deal is brought to parliament.

“I personally will not vote for a new bailout that will continue to destroy the country and hurt its people,” Mr Lafazanis said. “Syriza lawmakers must fight to the last minute to stop the government signing a third bailout.”

Finance minister Euclid Tsakalotos is holding new meetings with bailout negotiators from the European Commission, European Central Bank (ECB) and International Monetary Fund (IMF).

Ms Gerovasili said the government remained committed to concluding the talks by August 18 and that work on drawing up the text of a draft agreement would start this week.

Greece faces a loan repayment on August 20 worth more than €3bn to the ECB.

To avoid defaulting on it, Greece would need money from the bailout programme it is negotiating or, short of that, an interim loan from its creditors.


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