Greek Euro exit fears hit markets
EUROPEAN markets have suffered heavy losses after attempts to form a coalition government in Greece continued to stutter, increasing the likelihood of the debt-laden country exiting the euro.
The FTSE 100 Index in London was 95 points lower at 5480 after Greek president Karolos Papoulias failed to broker a deal late last night, a week after national elections produced a deadlock with no party winning enough seats to form a government.
The Radical Left Coalition party, known as Syriza, which came in a surprising second in the May 6 vote, announced it would refuse to join a coalition government.
Germany's Dax and France's Cac-40 were both down more than 2pc.
David Jones, chief market strategist, IG Index, said: "Two days of back-and-forth negotiations in Athens produced much heat but little light, and the world woke up on Monday morning to yet another day without a Greek government.
"New elections in June now look like a certainty, and the possibility of a Greek exit from the eurozone is being openly discussed in the corridors of power in Europe."
The uncertainty in Greece hit financial stocks, with investment firm Man Group falling 6pc to the bottom of the FTSE 100 Index. The company has seen its shares slide 66pc in the last 12 months.
Royal Bank of Scotland was not far behind, dropping 5pc, while Barclays fell 5pc and Lloyds Banking Group shed 6pc.