News / Economy

US, European Stocks Plunge, Borrowing Costs Rise

A stock exchange monitor displays the market trends in Milan, Italy, November 9, 2011.
A stock exchange monitor displays the market trends in Milan, Italy, November 9, 2011.
TEXT SIZE - +

Major U.S. and European stock exchanges plunged Wednesday and Italy's borrowing costs jumped, as the long shadow of the continent's debt crisis consumed the Greek and Italian governments.

Key stock markets in New York, London, Paris and Frankfurt all slid more than two percent, in part due to the political uncertainty in Athens and Rome.

Late in the day, outgoing Greek Prime Minister George Papandreou told a national television audience that he and opposition lawmakers had reached an agreement on a coalition government. The interim government will now have to carry out austerity measures demanded by the country's international creditors.

Papandreou pledged that Greece would do "whatever is required to remain" in the 17-nation bloc that uses the euro currency, and that the coalition government signals "a new future for our country."

Meanwhile, the Italian government faced record-high borrowing costs the day after Prime Minister Silvio Berlusconi said he would resign as soon as Parliament enacts budget cuts. The spending reforms are aimed at cutting the Rome government's massive debt in hopes of avoiding the need for an international bailout.

Interest rates on Italian government bonds topped 7 percent for the first time since the advent of the euro currency in 1999. That percentage rate is the threshold at which Greece, Ireland and Portugal all were forced to secure international bailouts in the last year and a half.

Greek news accounts said that 60-year-old Parliament chief Filippos Petsalnikos has been tapped as the interim prime minister after early speculation had centered on Lucas Papademos, an economist and former vice president of the European Central Bank.

Papandreou and opposition leader Antonis Samaras had been locked in talks since Monday on who will lead a power-sharing government until early elections, tentatively scheduled for February 19, are held.

Europeon Debt to GDP Ratio

The European Union demanded that both Papandreou's socialists and Samaras' opposition New Democracy party sign a written commitment to carry out the austerity measures as part of the debt-relief plan approved for Greece last month. Samaras balked at a written statement, calling it an insult to "national dignity" and insisting his verbal assent to the plan should be sufficient. It was not immediately known whether the dispute was resolved.  

European finance ministers are waiting for the formation of a new government in Greece before deciding whether to grant the country a crucial $11 billion loan installment.  

In Italy, one opposition lawmaker, Giuseppe Fiorini, said the country needs a government that can give Italy "international credibility," something he said Berlusconi has not been able to do.

"With the crisis continuing and Italy in pain I hope we can find a government that will give us international credibility and allow the country to provide the necessary reforms, which Berlusconi has not been able to give,'' said Fiorini.

One government debt analyst in London, Jan Randolph of IHS Global Insight, said investor concerns about the safety of Italian debt will not abate "until a solid and stable government actually implements austerity and undertakes reforms."

Some information for this report was provided by AP, AFP and Reuters.

You May Like

Photogallery Pope's Easter Prayer: Peace in Ukraine, Syria

Pontiff also calls for end to terrorist acts in Nigeria, violence in Iraq, and success in peace talks between Israelis and Palestinians More

Abdullah Holds Lead in Afghan Presidential Election

Country's Election Commission says that with half of the ballots counted, former FM remains in the lead with 44 percent of the vote More

Russia-Ukraine Crisis Could Trigger Cyber War

As tensions between Kyiv and Moscow escalate, so too has frequency of online attacks targeting government, news and financial sites More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Ukraine, Russia, United in Faith, Divided in Politicsi
X
Michael Eckels
April 19, 2014
There is a strong historical religious connection between Russia and Ukraine. But what role is religion playing in the current conflict? In the run-up to Easter, Michael Eckels in Moscow reports for VOA.
Video

Video Ukraine, Russia, United in Faith, Divided in Politics

There is a strong historical religious connection between Russia and Ukraine. But what role is religion playing in the current conflict? In the run-up to Easter, Michael Eckels in Moscow reports for VOA.
Video

Video Face of American Farmer is Changing

The average American farmer is now 58 years old, and farmers 65 and older are the fastest growing segment of the population. It’s a troubling trend signaling big changes ahead for American agriculture as aging farmers retire. Reporter Mike Osborne says a new report from the U.S. Census Bureau is suggesting what some of those changes might look like... and why they might not be so troubling.
Video

Video Donetsk Governor: Ukraine Military Assault 'Delicate But Necessary'

Around a dozen state buildings in eastern Ukraine remain in the hands of pro-Russian protesters who are demanding a referendum on self-rule. The governor of the whole Donetsk region is among those forced out by the protesters. He spoke to VOA's Henry Ridgwell from his temporary new office in Donetsk city.
Video

Video Drones May Soon Send Data From High Seas

Drones are usually associated with unmanned flying vehicles, but autonomous watercraft are also becoming useful tools for jobs ranging from scientific exploration to law enforcement to searching for a missing airliner in the Indian Ocean. VOA’s George Putic reports on sea-faring drones.
Video

Video New Earth-Size Planet Found

Not too big, not too small. Not too hot, not too cold. A newly discovered planet looks just right for life as we know it, according to an international group of astronomers. VOA’s Steve Baragona has more.
Video

Video Copts in Diaspora Worry About Future in Egypt

Around 10 percent of Egypt’s population belong to the Coptic faith, making them the largest Christian minority in the Middle East. But they have become targets of violence since the revolution three years ago. With elections scheduled for May and the struggle between the Egyptian military and Islamists continuing, many Copts abroad are deeply worried about the future of their ancient church. VOA religion correspondent Jerome Socolovsky visited a Coptic church outside Washington DC.
Video

Video Critics Say Venezuelan Protests Test Limits of Military's Support

During the two months of deadly anti-government protests that have rocked the oil-rich nation of Venezuela, President Nicolas Maduro has accused the opposition of trying to initiate a coup. Though a small number of military officers have been arrested for allegedly plotting against the government, VOA’s Brian Padden reports the leadership of the armed forces continues to support the president, at least for now.
Video

Video More Millenials Unplug to Embrace Board Games

A big new trend in the U.S. toy industry has more consumers switching off their high-tech gadgets to play with classic toys, like board games. This is especially true among the so-called millenial generation - those born in the 1980's and 90's. Elizabeth Lee has more from an unusual café in Los Angeles, where the new trend is popular and business is booming.
Video

Video Google Buys Drone Company

In its latest purchase of high-tech companies, Google has acquired a manufacturer of solar-powered drones that can stay in the air almost indefinitely, relaying broadband Internet connection to remote areas. It is seen as yet another step in the U.S. based Web giant’s bid to bring Internet to the whole world. VOA’s George Putic reports.
AppleAndroid

World Currencies

EUR
USD
0.7217
JPY
USD
102.17
GBP
USD
0.5949
CAD
USD
1.1009
INR
USD
60.326

Rates may not be current.