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Euro on the edge over Greek drama

Wednesday, May 09, 2012 - 02:13

May 9 - The euro fell close to a recent three-month low in early trade and is set for further falls on worries that Greek political uncertainty and a French leadership change may undermine the euro zone's austerity measures. Ciara Sutton reports.

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A third day of government coalition talks in Greece and politicians and investors are worried. Yiannis Tragakis a newly elected conservative MP says democracy and the euro are under threat. (SOUNDBITE) (Greek) YIANNIS TRAGAKIS, NEW DEMOCRACY MP, SAYING: "Logic will have to prevail so that a solution can be found because if the solution is not found the European orientation of our country is in danger." That prospect sent the euro to a recent three month low in early trade. Commodity prices also fell. Jason Conibear, director of foreign exchange firm Cambridge Mercantile, fears a Greek rejection of the current bailout agreement could be a disaster. (SOUNDBITE) (English) DIRECTOR OF FOREX FIRM CAMBRIDGE MERCANTILE, JASON CONIBEAR, SAYING: "If that should happen then all faith in the euro will be lost. My view is very simply that anybody who has any form of euro income over the next six months or so should be hedging and protecting their companies against risk." Greece's two main pro-bailout parties failed to win a majority in weekend elections. And the left-wing party that came second considers the EU/IMF rescue deal "null and void." That's raised questions over the country's ability to avoid bankruptcy. Rabobank's Jan Lambregts says Greece's future in the euro zone is looking precarious. (SOUNDBITE) (English) JAN LAMBREGTS, RABOBANK SAYING: "I put the odds there of Greece leaving at better than even, rising to 60-70 percent as they may very well be the sacrificial lamb on the alter of a new Europe as it is being shaped as people are simply running out of patience." Adding to market tensions, French President-elect Francois Hollande says his approach will focus on growth, rather than austerity - a move bound to unsettle Germany. The FTSE Eurofirst index opened fractionally higher in morning trade but soon dipped. There was one ray of light - German exports and imports rose in March. The figures suggest Europe's largest economy is fending off the debt crisis slightly better than others - although even Germany won't escape the fallout if Greece does exit the euro. Ciara Sutton, Reuters.

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Euro on the edge over Greek drama

Wednesday, May 09, 2012 - 02:13