Markets retreat as fears mount over Greek default

Markets are pricing in a one-in-five chance that Greece will default on its debts within the space of a year, after the government called snap general elections this week. The Athens stock exchange fell 0.5% yesterday after closing 4% lower on Monday. Government borrowing costs for ten-year Greek debt are now close to 10% amid investor concern that anti-austerity party Syriza may form the next government. While the Greek political crisis has largely been contained within the country, European stock markets all lost ground yesterday as investors also reacted negatively to another fall in the price of oil, despite concern that the turmoil in Libya is threatening supply. German finance minister Wolfgang Schauble said Greece's austerity plan was non-negotiable.

Markets are pricing in a one-in-five chance that Greece will default on its debts within the space of a year, after the government called snap general elections this week. The Athens stock exchange fell 0.5% yesterday after closing 4% lower on Monday. Government borrowing costs for ten-year Greek debt are now close to 10% amid investor concern that anti-austerity party Syriza may form the next government. While the Greek political crisis has largely been contained within the country, European stock markets all lost ground yesterday as investors also reacted negatively to another fall in the price of oil, despite concern that the turmoil in Libya is threatening supply. German finance minister Wolfgang Schauble said Greece's austerity plan was non-negotiable.

Note: News bulletin content has been provided by a third-party and is not the opinion of Santander

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