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Greece seeks to block speculators | |
(about 2 hours later) | |
Greek regulators have announced a ban on short-selling on Greece's stock market, following steep falls in bank shares. | |
The ban is designed to prevent investors betting on falls in share prices - believed to undermine confidence in the market. | |
On Tuesday, Greek bank shares fell 9% amid continued concern over Greece's public finances. | |
The move also follows big falls in Asian markets on Wednesday. | |
Japan's leading share index, the Nikkei 225, closed down more than 2.5% after steep falls in European stocks on Tuesday. | |
Shortly after opening on Wednesday, stock markets in Frankfurt and Paris were both down by a further 0.5%. | |
The short-selling ban, designed to stabilise the market, only affects stocks listed in Greece, however. | |
Global shares have tumbled after the credit rating agency Standard and Poor's downgraded Greek debt to "junk" on Tuesday. | Global shares have tumbled after the credit rating agency Standard and Poor's downgraded Greek debt to "junk" on Tuesday. |
That means the rating agency views Greece as a much riskier place to invest, and increases the interest rate investors will charge the Greek government for loans. | |
'No restructure' | 'No restructure' |
On Wednesday, that interest rate hit 10.13% for 10-year Greek bonds - another all-time high for a eurozone country. | |
Meanwhile plans to secure a bail-out for the Greek economy will continue later, with the International Monetary Fund (IMF) arriving in Berlin to urge German MPs to agree to a rescue deal. | |
Dominique Strauss-Kahn will travel to Germany along with the president of the European Central Bank, Jean-Claude Trichet, to persuade politicians that giving Greece billions of euros in aid is a "last resort". | |
Progress on a deal to bail out Greece may also help to steady investors' nerves. | |
During a visit to Tokyo on Wednesday, European Council President Herman Van Rompuy announced a meeting of eurozone heads of state and government would be held on 10 May to discuss the Greek crisis. | During a visit to Tokyo on Wednesday, European Council President Herman Van Rompuy announced a meeting of eurozone heads of state and government would be held on 10 May to discuss the Greek crisis. |
You have to be honest; if not, nobody can help you Angela Merkel, German Chancellor Your comments | You have to be honest; if not, nobody can help you Angela Merkel, German Chancellor Your comments |
He insisted negotiations on the aid were "well on track" and that there was "no question about restructuring" Greek debt. | He insisted negotiations on the aid were "well on track" and that there was "no question about restructuring" Greek debt. |
Meanwhile, the Financial Times newspaper in the UK reports that the IMF is considering raising its contribution to the bail-out by 10bn euros ($13.3bn; £8.7bn) to 25bn euros. | |
Correspondents say the idea of a bail-out is unpopular with the German public, which doubts it will save Greece from going bankrupt. | Correspondents say the idea of a bail-out is unpopular with the German public, which doubts it will save Greece from going bankrupt. |
Greece needs to secure at least some of the funding by mid-May, when it is due to repay investors around 8.5bn euros of debt. | |
In Greece itself, demonstrators called for the country to default on its debts, so that foreign banks would pay the price for the crisis. | In Greece itself, demonstrators called for the country to default on its debts, so that foreign banks would pay the price for the crisis. |
Contagion risk | |
The concern among investors now is that the loss of confidence in Greece could spread to other weak eurozone economies. | |
On Tuesday, Standard & Poor's also cut Portugal's credit rating by two notches to A-, amid concerns about its public finances. | |
Some investors have expressed concern that the current market jitters could turn into something much bigger. | Some investors have expressed concern that the current market jitters could turn into something much bigger. |
World markets are not convinced the eurozone will agree a bail-out | World markets are not convinced the eurozone will agree a bail-out |
"We have the makings of a market crisis here," Neil Mackinnon, a global macro strategist at VTB Capital, told the Associated Press news agency. | "We have the makings of a market crisis here," Neil Mackinnon, a global macro strategist at VTB Capital, told the Associated Press news agency. |
Germany's willingness to help Greece out is one major concern. | |
On Tuesday, German Chancellor Angela Merkel reiterated that Greece had to first outline further steps to reduce its budget deficit before her government would endorse the release of funds for a 45bn euro rescue package. | |
"You have to economise, you have to become fair, you have to be honest; if not, nobody can help you," she warned the Greek people. | "You have to economise, you have to become fair, you have to be honest; if not, nobody can help you," she warned the Greek people. |
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