Euro plummets amidst Greek chaos

Greek bailout fails to stem concern of Eurozone contagion.

Market confidence in the €110 billion Greek rescue package appears to be faltering, with shares in Greek banks falling by 4 per cent today and Greece's share market falling by 3 per cent. The euro was down to a fresh one-year low at the start of the week, despite a bailout deal made over the weekend, following fears that weak Eurozone economies Spain and Portugal may also be forced to seek help from their European cousins.

In Spain the stock market fell, its Ibex index of leading shares down by 3.3 per cent and Banco Santander, the largest bank, down by 5 per cent. Although credit ratings agency Fitch has said that it will retain its triple-A assessment of Spain's sovereign creditworthiness, Standard & Poor's cut their rating for the country last week to AA.

There was continued popular hostility to the austerity programme in Greece today, with school teachers and hospital workers joining the fray as public sector workers began a two day strike. All flights to and from Greece are expected to be cancelled tomorrow as air traffic controllers go on a one day strike. Workers are unhappy about pension and bonus cuts.