Shares fall in Europe on Greek political uncertainty
Published: 14th May 2012 10:59:16
European shares have fallen as the continuing political uncertainty in Greece undermines investor confidence.
Greek President Karolos Papoulias failed to form a coalition government through talks on Sunday and will continue discussions with political leaders on Monday evening.
Bank shares are worst hit, particularly in Spain and France, with Madrid's Ibex index down 2.8% and the Cac down 2.3%.
London's 100 share index is down 1.7% and Germany's Dax down 2%.
French banks were among the biggest fallers as investors worried about their exposure to other troubled eurozone countries.
BNP Paribas was 3.4% lower, Societe Generale lost 3.3% and Credit Agricole fell 3.4%.
Spanish banks Banco Santander and Bankia were down 3.4% and 4.4% respectively, as they said they would set aside an extra 2.7bn euros (£2.16bn) and 2.1bn euros to meet new government requirements aimed at cleaning up the country's ailing property market.
Meanwhile, both Spain and Italy carried out successful bond auctions on Monday.
Appetite for Spanish and Italian debt was more than strong enough, but the return demanded by investors in Spain's debt was higher than in previous auctions, reflecting a dip in confidence.
Spain sold 2.9bn euros in short-term debt, paying 2.985%, up from 2.623% last time.
The difference in the rate demanded by Spanish 10-year bond investors over the equivalent German bunds hit 4.83%, its highest level since the creation of the euro.
The yield, or interest rate, on Spain's key 10-year bonds, which are traded on the market, jumped 23 basis points to a record high of 6.22%.
Italy raised 5.25bn euros, paying a yield of 3.91%, almost unchanged on the previous rate of 3.89%.
The undermining factor is again the future of the eurozone.
Greece's lack of a government puts in doubt its ability to stick to austerity measures imposed as part of its financial bailout. Without holding to agreed cuts it will not get the rest of the support funds it needs to function.
Adding to the lack of clarity is the fact that anti-bailout parties did well in the elections.
Anti-austerity feeling may be growing in Germany too after Chancellor Angela Merkel's party suffered a defeat on Sunday in an election in North Rhine-Westphalia, the country's most populous state.
On top of that, new French President Francois Hollande won his place after promising to focus more on growth rather than austerity, raising concerns as to whether he will be able to work as closely with Mrs Merkel as his predecessor Nicolas Sarkozy did.
The two were the driving force behind the eurozone's fiscal compact.
Later on Monday, eurozone finance ministers will meet in Brussels to discuss the situation in Greece and Spain.
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Harvard CitationBBC News, 2012. Shares fall in Europe on Greek political uncertainty [Online] (Updated 14th May 2012)
Available at: http://www.ukwirednews.com/news/1428346/Shares-fall-in-Europe-on-Greek-political-uncertainty [Accessed 9th Mar 2014]
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With the doors to its brand new £1million training centre officially open, one of the UK's leading apprentice training providers, Bristol based S&B Automotive Academy, is showcasing its world-class facilities by launching a series of foreign student exchanges for the first time in its 41-year history. To get a flavour of what life is like as an apprentice in the UK, the Academy hosted 16 apprentice engineers and bus drivers from the G9 Automotive College in Hamburg, Germany, as part of a Europe-wide vocational training initiative called the ‘Leonardo Programme’ with support from the European Social Fund. In a reciprocal arrangement, S&B will be sending nine apprentices to Germany during February 2012 so that they can get an appreciation of life in the automotive industry on the Continent. A further three German exchange groups are being planned for next year. Designed to assist the development of vocational skills and training across Europe, including work placements for trainees, the Leonardo Programme has a budget of €1.75bn, which is helping to encourage UK organisations to work with their counterparts abroad. In what is expected to be another challenging year for employers in the UK automotive sector, S&B’s Chief Executive, Jon Winter, claims that the exchange initiative will bring many benefits to the Academy and its apprentices: “In a world of global automotive brands, it’s important for our learners to understand the international context of the industry they have chosen to make their career. This new exchange programme will enable apprentices and Academy staff alike to achieve a better understanding of the challenges and opportunities within the automotive arena in Europe. With the Academy’s influence also extending to the USA and Asia, there’s every possibility that this initiative could move further afield in the future.” Continued Winter: “The need for skilled technicians across the world is on the increase and we actively encourage our apprentices to look at broader horizons during their training. Many of them have already learned the phrase ‘Vorsprung durch Gelehrtheit’, quite simply, ‘Advancement through learning.” In the 2010/11 academic year, S&B doubled the number of successful Apprenticeships over the previous year with some 350 apprentices graduating from the Academy. At the same time, achievement levels reached an all-time high with an overall success rate of 85%. For those learners on the Advanced Apprenticeship three-year programme, success rates were even higher, at over 98%. PHOTO CAPTION: As part of their exchange visit, S&B Automotive Academy arranged for the German apprentices to visit Hampshire bus operator, Bluestar, at its Barton Park depot. The students are pictured with S&B’s Andy West (3rd right) and Steve Prewett, Bluestar’s Area Engineering Manager (2nd right). Ends http://www.sandbaa.com
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