Greek election uncertainty overshadows markets

Pan Pylas - The Associated Press

LONDON (AP) — Renewed uncertainty over Europe's ability to deal with its spawning debt crisis following elections in Greece and France hammered stock markets Monday, with the main exchange in Athens down a massive 8 percent. Investors have been particularly spooked by the Sunday election in Greece, which has resulted in a split Parliament where no party looks like it will be able to form a government. The two parties that governed as a coalition for the past six months were pummeled to the benefit of more extreme parties of the right and left. The socialist Pasok party suffered the biggest retreat. Its share of the vote collapsed from around 43 percent in the last election in 2009 to a little over 13 percent.

A period of uncertainty looms for the bailed-out country, which is in its fifth year of recession and has over half its youth out of work following big spending cuts and tax increases in return for crucial international bailout funds. If no government can be formed that can command a majority in Parliament, another general election within the next two months seems possible.

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May 07, 2012