European shares traded lower on Tuesday (May 8) with concerns growing about Greece’s political future as the country’s parties struggle to form a new government. SYRIZA leader is due to receive the exploratory mandate at 2pm today, after Samaras’s failure to form a government.
Greece’s mainstream conservatives, ND, failed to reach a deal for a coalition following Sunday’s election, leaving it to the Left Coalition party, SYRIZA, to form a government, which would be opposed to the country’s EU/IMF bailout.
“People are looking for the next worry, which is that the Greeks will talk for six hours and come to no agreement,” Justin Haque, a pan-European trader at Hobart Capital Markets said. “If the IMF stops paying Greece, that’s a country in starvation.”
The Athens General Index was down 0.7 percent after falling 7 percent on Monday, while France’s Credit Agricole, which owns Greek bank Emporiki, fell 2.3 percent.
In a show of flexibility, that could prove important for Athens and other indebted European countries, the IMF’s Managing Director Christine Lagarde said governments “should not fight any fall in tax revenues or rise in spending caused solely because the economy weakens.”