Greece’s political woes re-erupted as a threat to global financial stability yesterday, triggering the biggest drop on the Athens stock exchange since the 1980s and sending reverberations through world markets.
Concerns about Greece fed into a broader fall in global stock markets, already spooked by sliding oil prices and yesterday’s sharp drop in Chinese equities. The S&P 500 fell 1 per cent shortly after opening while the EuroStoxx index of eurozone companies fell for the second day, down 2.5 per cent.
The trigger for the plunge was prime minister Antonis Samaras’s announcement of a snap presidential election. If he fails to win sufficient support for his candidate a general election could follow, which investors fear might bring to power the radical left Syriza party.