Greek political parties are incapable of nearing agreements to form a new government following elections held at the end of last week. The continued lack of a power that can comply with demands imposed by the bailout send European markets plunging downward and stoked the European sovereign debt crisis once more.
Debt markets in France, Spain and Belgium were most unstable, while equities sales soared in Greece. Doubts about Greece's political future sent the Ase 20, the main Greek stock index, down by 4.4%, adding to 8.8% losses posted on Monday.
The political standstill that Greece has fallen into re-raised the specter of a bankruptcy in the country. Especially when the European Central Bank (ECB) warned that there is no alternative to the current bailout plan. "It should be clear to Greece that there is no recourse besides the recovery program it agreed to if it wants to stay on the euro," said Jörg Asmussen, a German representative for the ECB. These words topped off a day of volatile trading. The Vix surpassed 20 points whereas a week ago it was situated at 16 points. It is currently two points above its yearly average. The Greek stock market plunged 231.8 points led mostly by poor performance of banking stocks. The National Bank of Greece, for example, lost more than 8% on the day.
