Experts believe the Eurozone is heading for another crisis after election results in France and an expected Spanish application for a bail-out.
The Euro reached a three month low, below $1.30, on Monday when markets reacted badly to the election of Francoise Hollande as the new French president.
Hollande is demanding a renegotiation of the terms of the EU Austerity measures and has already clashed with German chancellor Angela Merkel.
The Spanish decision to seek a bail-out for troubled bank Bankia has also added to the pressure on Europe’s single currency as it fell below $1.30 for the first time since January.
The Irish Times reports that Hollande’s victory and the failure of any of the Greek pro-austerity parties to make gains in their elections is seen as a sign of public frustration with the European authorities’ approach to the euro zone crisis.
The paper says that Greek stocks tumbled the most in six months following the weekend election in which the country’s two main political parties failed to achieve a combined majority.
National Bank of Greece, the country’s largest lender, plunged 8.3 per cent, while Greece’s biggest electricity producer, Public Power, fell by 14 per cent.
The benchmark ASE Index slid 6.7 per cent to 643.87 at the close of trading in Athens, with 53 of 59 stocks declining. The gauge had earlier dropped as much as 8.3 per cent, the largest decline since October 2008.
Reports in Spain say that Bankia could need as much as $13 billion in capital.
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