ATHENS: Greece began preparing Friday for its second election in just six weeks, with increasing alarm over the crisis in the eurozone after the savage downgrading of banks in Spain.
European stock markets opened lower after heavy losses in Asia overnight, while the euro also lost ground, slipping to $1.2657 from $1.2693 in New York.
World leaders meet US President Barack Obama later Friday, with Greece top of the agenda at a two-day Camp David summit as the debate rages over the best way forward -- whether to go for growth or more austerity.
Greek voters dramatically rejected painful spending cuts in the deadlocked May 6 poll and are expected to do so again in the June 17 election, raising concerns about the fate of the latest EU-IMF bailout package worth 240 billion euros ($300 billion).
Fitch Ratings agency cited the prospect of another inconclusive election and Greece being forced out of the eurozone as it cut its rating on the country's debt to "CCC" or vulnerable to default.
"In the event that the new general elections scheduled for 17 June fail to produce a government with a mandate to continue with the EU-IMF programme of fiscal austerity and structural reform, an exit of Greece from EMU would be probable," the rating agency warned.
Many EU leaders have insisted that there can be no change to the terms of the bailout but have also began to allow some room for movement, especially as new French President Francois Hollande won power this month on a growth pledge.
The eurozone's woes were exacerbated on Thursday when Moody's downgraded 16 Spanish banks and figures showed that the country had slid into recession.
European parliament chief Martin Schulz warned Friday that any Greek exit from the eurozone could see its economy collapse in days, with untold consequences.
"Many people believe that it would be the end of a negative cycle but for me it would be the beginning of an even more negative cycle," Schulz told German radio from Athens where he is due to meet President Carolos Papoulias.
indiatimes.com
European stock markets opened lower after heavy losses in Asia overnight, while the euro also lost ground, slipping to $1.2657 from $1.2693 in New York.
World leaders meet US President Barack Obama later Friday, with Greece top of the agenda at a two-day Camp David summit as the debate rages over the best way forward -- whether to go for growth or more austerity.
Greek voters dramatically rejected painful spending cuts in the deadlocked May 6 poll and are expected to do so again in the June 17 election, raising concerns about the fate of the latest EU-IMF bailout package worth 240 billion euros ($300 billion).
Fitch Ratings agency cited the prospect of another inconclusive election and Greece being forced out of the eurozone as it cut its rating on the country's debt to "CCC" or vulnerable to default.
"In the event that the new general elections scheduled for 17 June fail to produce a government with a mandate to continue with the EU-IMF programme of fiscal austerity and structural reform, an exit of Greece from EMU would be probable," the rating agency warned.
Many EU leaders have insisted that there can be no change to the terms of the bailout but have also began to allow some room for movement, especially as new French President Francois Hollande won power this month on a growth pledge.
The eurozone's woes were exacerbated on Thursday when Moody's downgraded 16 Spanish banks and figures showed that the country had slid into recession.
European parliament chief Martin Schulz warned Friday that any Greek exit from the eurozone could see its economy collapse in days, with untold consequences.
"Many people believe that it would be the end of a negative cycle but for me it would be the beginning of an even more negative cycle," Schulz told German radio from Athens where he is due to meet President Carolos Papoulias.
indiatimes.com
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