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Greece debt crisis continues to pressure markets | Greece debt crisis continues to pressure markets |
(about 1 hour later) | |
Asian financial markets have fallen again as investors remain worried about the impact of Greece's economic crisis. | Asian financial markets have fallen again as investors remain worried about the impact of Greece's economic crisis. |
Japan's main share index fell 0.7% while Hong Kong's was down 0.4%, adding to deeper falls seem in Thursday's trading. | Japan's main share index fell 0.7% while Hong Kong's was down 0.4%, adding to deeper falls seem in Thursday's trading. |
They follow on from a troubled day of trading on Europe's markets. | They follow on from a troubled day of trading on Europe's markets. |
The renewed falls come as the Greek Prime Minister prepares to reshuffle his cabinet to try to ensure austerity measures are passed. | The renewed falls come as the Greek Prime Minister prepares to reshuffle his cabinet to try to ensure austerity measures are passed. |
China's concerns | China's concerns |
Japan's Nikkei index has fallen 1.8% over the week, and is about 2.3% down in the past two days. Hong Kong's main index is down 2.4% over the week and about 2.1% lower in the past two days. | Japan's Nikkei index has fallen 1.8% over the week, and is about 2.3% down in the past two days. Hong Kong's main index is down 2.4% over the week and about 2.1% lower in the past two days. |
The euro fell 0.2% to around $1.4175 in early Asian trade on Friday. | The euro fell 0.2% to around $1.4175 in early Asian trade on Friday. |
Meanwhile, China's Foreign Ministry said on Friday that it was "vitally important that Europe overcomes its debt crisis". | Meanwhile, China's Foreign Ministry said on Friday that it was "vitally important that Europe overcomes its debt crisis". |
The comments come as the Chinese Premier, Wen Jiabao, prepares for a visit next week that will include Hungary, the UK and Germany. | The comments come as the Chinese Premier, Wen Jiabao, prepares for a visit next week that will include Hungary, the UK and Germany. |
On a previous visit, to France, Portugal and Spain, he offered to help Europe overcome its debt crisis. | On a previous visit, to France, Portugal and Spain, he offered to help Europe overcome its debt crisis. |
The Vice Foreign Minister, Fu Ying, said: "China has consistently been concerned about the state of the European economy." | The Vice Foreign Minister, Fu Ying, said: "China has consistently been concerned about the state of the European economy." |
Angela Merkel and Nicolas Sarkozy are due to meet in Berlin on Friday morning to discuss how to ensure the country can avoid default on its sovereign debt. | Angela Merkel and Nicolas Sarkozy are due to meet in Berlin on Friday morning to discuss how to ensure the country can avoid default on its sovereign debt. |
French and German banks have the most exposure to Greek debt, holding, between them, 55% of Europe's total exposure. | French and German banks have the most exposure to Greek debt, holding, between them, 55% of Europe's total exposure. |
Greek two-year bond yields rose 1.6 percentage points to 28.6% on Thursday. | Greek two-year bond yields rose 1.6 percentage points to 28.6% on Thursday. |
Finance chief | |
To avoid the government defaulting on its debts, Prime Minister George Papandreou must pass new spending cuts and sell-offs of state property to receive new funds from the European Union and International Monetary Fund. | To avoid the government defaulting on its debts, Prime Minister George Papandreou must pass new spending cuts and sell-offs of state property to receive new funds from the European Union and International Monetary Fund. |
On Friday, he began forming a new cabinet to muster support for the painful economic reforms. | |
The key casualty of the re-shuffle was finance minister George Papaconstantinou, the main architect of hugely unpopular budget cuts. | |
He is being replaced by Evangelos Venizelos, the defence minister. Mr Papaconstantinou is moving to the environment ministry. | |
On Thursday, in a statement intended to soothe markets, the European Union's top economic official, Olli Rehn, said he expected the EU and IMF to release a crucial 12bn euro loan in early July to keep Athens afloat. | |
The crisis comes amid a backdrop of soaring unemployment, with figures on Thursday showing that the jobless rate in Greece rose to 15.9% in the past three months, up from 14.2% for the same quarter last year. | The crisis comes amid a backdrop of soaring unemployment, with figures on Thursday showing that the jobless rate in Greece rose to 15.9% in the past three months, up from 14.2% for the same quarter last year. |
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