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Greek Debt Crisis

Markets worry as Greece struggles to form government

Stephen Beard May 9, 2012

Stacey Vanek Smith: Greece is still struggling to form a government after an indecisive election over the weekend. Meanwhile, the country is on track to run out of money as early as next month and that’s got investors nervous.

Marketplace’s Stephen Beard has more.

Stephen Beard: Today Greece’s left-wing Syriza party meets with the country’s two mainstream parties to try to form a governing coalition. The chances are slim. The two sides disagree vehemently on the austerity measures agreed for the second bailout.

Greek commentater John Psarapolous:

John Psarapolous: I don’t think there’s going to enough of a will to compromise that they will paper over their differences on this major issue of how to deal with the austerity cuts and the bailout.

He says another election is now likely by the middle of June. And there’s the problem. Greece won’t be able to pass another batch of budget cuts in time to qualify for the next chunk of bailout money, raising a grim possibility…

Psarapolous: Greece technically goes bankrupt in mid-June because it won’t have received any more bailout instalment.

And this is why financial markets are worried. Once again Greece is staring default in the face. And investors are grappling with the prospect of more agony in the eurozone.

In London I’m Stephen Beard for Marketplace.

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