Newspaper article The Evening Standard (London, England)

Don't Delay, Greeks Told as Turmoil Hits Spain

Newspaper article The Evening Standard (London, England)

Don't Delay, Greeks Told as Turmoil Hits Spain

Article excerpt

Byline: Nicholas Cecil and Paul Anast in Athens

EUROPE was plunged into fresh economic turmoil today despite Greeks voting to stay in the euro.

Relief at the result in Greece, which saw markets bounce when trading opened, was swept away within hours. Fears spiralled over Spain's plight as 10-year bond yields soared above seven per cent -- the danger level at which countries are believed to be close to needing a bail-out.

EU leaders also urged the Greek parties not to dither over cobbling together a coalition to end the political deadlock in Athens.

Arriving in Mexico for a G20 summit, David Cameron said: "If you are a Greek political party and want to stay in the eurozone and accept the consequences that follow you have got to get on with it and help form a government. A delay could be very dangerous."

The Prime Minister also warned that the eurozone faced "perpetual stagnation" or a breakup if action was not taken to tackle the deep-rooted problems at the heart of its economic crisis.

Antonis Samaras, leader of the New Democracy party which came first in the Greek elections, urged his rivals to join him in a Continued on Pages 6 & 7

Continued from Page 1 government of "national salvation". But with concerns growing over the Spanish economy, as well as Italy and Portugal, shadow chancellor Ed Balls told the Evening Standard: "The global hurricane is well and truly upon us."

As Spain's debt crisis grew, the country's treasury minister Cristobal Montoro appealed to the European Central Bank to intervene, saying: "The ECB must respond firmly, with reliability, to these market pressures that are still trying to derail the joint euro project."

Shares across Europe had risen early today after pro-austerity party New Democracy came first in the Greek elections -- but soon lost early gains. New Democracy won 29.7 percent of the vote (129 seats out of 300). The far-Left Syriza group, which opposes the bail-out for Greece, won 26.9 percent (71 seats) and the socialist Pasok party took 12.3 percent (33 seats), with nearly all the votes counted. Mr Samaras hailed the result as a "victory for all Europe" as he prepared to start coalition talks with Pasok and possibly another anti-austerity party.

World leaders welcomed the Greek vote and German foreign minister Guido Westerwelle hinted that Greece might be able to renegotiate the timing of some of its bail-out repayments.

But focus has shifted to Spain where 10-year government bond yields rose to 7.22 per cent, a euro-era high, and to Italy, where they breached six per cent. Greece, Ireland and Portugal were forced to seek international bailouts soon after their 10-year bond yields surpassed seven per cent.

Within two hours of opening, the FTSE 100 and most markets across Europe had lost their early gains. …

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