News / Economy

European Stocks Stall After Brief Rally

A European Union flag flies outside the stock exchange in Athens, Greece, May  2012.
A European Union flag flies outside the stock exchange in Athens, Greece, May 2012.
VOA News
Stocks in Europe gave up their initial gains Monday, failing to continue a rally seen in Asia after pro-bailout parties won enough votes in Greece's parliamentary elections to form a government.

Greece's stock exchange surged more than 7 percent at one point, but lost much of its early gain. Elsewhere in Europe, fears about other struggling economies, especially Spain, erased early advances and stocks closed mixed. Major U.S. stock indexes closed mixed Monday.

Borrowing costs for the Madrid government soared to their highest point since Spain adopted use of the euro 13 years ago. The interest rate on Spanish debt topped 7 percent, the point at which Greece, Ireland and Portugal all were forced to secure international bailouts in the last two years.

Japan's Nikkei index finished the day up nearly 2 percent, and in Hong Kong, the Hang Seng gained 1 percent. Analysts, including Robert Halver at Baader Bank, cautioned that any rally could be short-lived because of the extent of the economic problems in Greece, now in its fifth year of recession.
 
"We will have, after a short euphoria, the same old crisis because no problem has been solved," he said. "It is still clear that the Greeks will not survive in the eurozone. No private investment will flow into Greece as the danger that Greece will leave the eurozone is still massive, [and] the yield prospects are very low, so Greece is still the focus of the euro crisis and of the financial markets."

Economist Juan Carlos Martinez of the IE Business School, said European leaders must hold to governmental austerity measures, but still promote economic growth.
 
"No matter how hard Spain tries, and no matter what happens in Greece, a part of the solution for Spain, for Italy, and for some other European countries, is a change on European policies," he said. "It is absolutely necessary to keep the austerity measures, especially in Spain, but it is also absolutely necessary to find some kind of levers or bonds that will allow to combine that austerity with the impulse for growth. Without growth it will be very hard for Spain, no matter what happens in Greece, to get out of the serious situation we are in."

The ongoing turmoil in the 17-nation euro currency bloc has affected markets outside of the continent.

In Afghanistan Sunday, the head of money exchangers in Kabul, Amin Jan Khosti, said traders were swapping euros for dollars to escape the fluctuating situation in Europe.

"Today when I was at the market, people mostly exchanged euro," he said. "They think if today's Greece's turn, maybe tomorrow is Spain and next it will be Portugal's. People think every day their budget deficit is getting deeper."

Khosti also said Afghan businessmen are worried that the euro's ups and downs will damage their trading. Afghans, he added, are already thinking about how the pullout of international troops in 2014 will affect the country's financial situation.

"Because it was Sunday in Europe and we couldn't check the value of the euro online, but when the news about Greece's election and opposition being ahead in the polls reached us, the Euro, which traded 1.26 to dollar, came down to 1.06," he said. "People were trying to exchange euro to dollar."

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

You May Like

Sydney Hostage-taker Failed to Manipulate Social Media

Gunman forced captives to use personal Facebook, YouTube accounts to issue his demands; online community helped flag messages, urged others not to share them More

UN Seeks $8.4 Billion to Help War-Hit Syrians

Effort aimed at helping Syrians displaced within their own country and those who've fled to neighboring ones More

Who Are the Pakistani Taliban?

It's an umbrella group of militant organizations whose objective is enforcement of Sharia in Pakistan 'whether through peace or war' More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Putin: Russian Economy to Rebound in 2 Yearsi
X
December 18, 2014 5:13 PM
Russian President Vladimir Putin held his annual end-of-the-year news conference Thursday, tackling questions on the Russian economy, the crisis in Ukraine and Russian relations with the west. VOA's Jeff Custer reports.
Video

Video Putin: Russian Economy to Rebound in 2 Years

Russian President Vladimir Putin held his annual end-of-the-year news conference Thursday, tackling questions on the Russian economy, the crisis in Ukraine and Russian relations with the west. VOA's Jeff Custer reports.
Video

Video Nigerians Fleeing Boko Haram Languish in Camp Near Capital

In its five-year effort to impose Islamic law in northeastern Nigeria, the Boko Haram extremist group has killed thousands of people and forced hundreds of thousands to flee. Some of those who ran for their lives now live in squalor on the edges of the capital, Abuja. Chris Stein reports for VOA.
Video

Video Detained Turkish Journalists Follow Teachings of US-Based Preacher

The Turkish government’s jailing of critical journalists has sparked international condemnation and is being seen as an effort to undermine the followers of an ailing Turkish preacher based in the United States. VOA religion reporter Jerome Socolovsky has more.
Video

Video Will Pakistan School Shooting Galvanize Pakistan Against Extremism?

The attack on a military school in Pakistan’s northwest city of Peshawar left 141 dead, including 132 children. Strong statements of condemnation poured in from across the world. The country announced three days of mourning, and the leadership, both political and military, promised retribution. VOA's Ayesha Tanzeem looks at how likely the Pakistani government is to clamp down on all extremist groups.
Video

Video ‘Anti-Islamization’ Marches Increase Tensions In Germany

Anti-immigrant rallies in Germany have been building in recent weeks, peaking Monday night in the city of Dresden where tens of thousands of people turned out to demonstrate against what they call the ‘Islamization’ of the West. Germany has offered asylum to more Syrian refugees than any other country, and this appears to have set off the protests. Henry Ridgwell reports from London.
Video

Video Aceh Rebuilt Decade After Tsunami, But Scars Remain

On December 26, 2004 there was an earthquake in the Indian Ocean so powerful it caused the Earth’s axis to wobble a few centimeters. Onshore on the island of Sumatra, the resulting tsunami was devastating. A decade later, VOA Correspondent Steve Herman reports from Banda Aceh, Indonesia, where although there is little remaining evidence of the physical devastation, the psychological scars among survivors remain.
Video

Video Refugees Living in Kenya Long for Peace in the Home Countries

Kenya is host to numerous refugees seeking safe haven from conflict. Immigrants from Somalia face challenges in their new lives in Kenya. Ahead of International Migrants Day (December 18) Lenny Ruvaga has more for VOA News from the Kenyan capital.
Video

Video Turkey's Authoritarianism Dismays Western Allies

The Turkish government has been defiant in the face of criticism at home and abroad for its raids targeting opposition media. The European Union on Monday expressed dismay after President Recep Tayyip Erdogan lashed out at Brussels for criticizing his government's action. Turkey's bid to be considered for EU membership has been on hold while critics accuse the NATO ally of increasingly authoritarian rule. Zlatica Hoke reports.

All About America

AppleAndroid

World Currencies

EUR
USD
0.8140
JPY
USD
118.81
GBP
USD
0.6402
CAD
USD
1.1597
INR
USD
63.066

Rates may not be current.