European markets slump on Greek and French fears as bond yields widen
EUROPEAN stock markets slumped today amid question marks over Greece's commitment to its bailout pledges and France's future following weekend elections.
The UK's FTSE 100 fell to its lowest level since November last year, while the Athens bourse slid to depths not seen since 1992.
In repsonse to the uncertainty, France's CAC fell 2.8pc, Germany's Dax dropped 1.9pc, Spain's Ibex closed down 0.8pc and the Italian MIB was 2.4pc worse off.
The FTSE 100 fell 1.8pc to close at 5554.55.
Bond yields in France, Italy and Spain widened , the latter by 10 basis points, as investors felt the news impacted on the countries' abilities to pay back their debts.
Shares across the continent suffered after Antonis Samaras, leader of Greece's conservative New Democracy party, admitted defeat in talks to form a coalition government after being rebuffed by anti-austerity parties.
"I did whatever I could to secure a result but it was impossible," he said in a televised address after a day of meetings with other leaders.
Alexis Tsipras, the 37-year-old leader of the Syriza party, said he would seek to form a Left-wing alliance to reject the country's loan agreement's "barbaric" austerity measures, which have seen government wages and pensions cut by up to 30pc.
Greece's leading share index fell 3.6pc, led by a 10pc slump in the banking sector.
Meanwhile, Germany and the EU have warned Francois Hollande, France's new Socialist president, that he will not permitted to renegotiate a eurozone austerity treaty despite its policies being rejected by French voters.
Mr Hollande made renegotiation of the eurozone's "fiskalpakt", a treaty signed by 25 EU countries, a central plank in the anti-austerity election campaign that swept him to power on Sunday night.
During his victory speech, he declared that France would end the "inevitably" of austerity, a direct challenge to Germany's drive to enshrine budgetary and debt controls in EU treaties.
However, Angela Merkel, the German chancellor, said: "We in Germany are of the opinion, and so am I personally, that the fiscal pact is not negotiable. It has been negotiated and has been signed by 25 countries."