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Greek deal fails to impress markets

Tuesday, February 21, 2012 - 02:11

Feb. 21 - Financial markets welcomed a second bailout for Greece but shares remained largely unchanged with many analysts concerned whether growth will return to this battered economy. Hayley Platt reports.

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There was a sea of green when Athens stock exchange opened just hours after EU finance ministers finally agreed to give Greece a second bailout. Stocks rose in early trade before falling back loosing just over 2 percent. But the news failed to ignite other European markets. After months of turmoil in the euro zone many analysts fear the deal changes nothing. Richard McGuire from Rabobank. (SOUNDBITE) RICHARD MCGUIRE, SENIOR FIXED INCOME STRATEGIST, RABOBANK, SAYING (English): "It's sort of a question of going one step forward or two steps backward. For now the Greek deal arguably has diverted rather than averted disaster so this is probably just the next bailout and only really the first attempt at restructuring." The euro jumped slightly gaining half a cent but French stocks were slightly down. Dominique Dequidt is a fund manager in Paris. (SOUNDBITE) (French) DOMINIQUE DEQUIDT, FUND MANAGER AT KBL RICHELIEU, SAYING: "The markets have anticipated all the news, but we will see what will happen to the Greek economy for the next few months, the next few years. And we will see what will be in the next package -- if there is another package." Traders in Frankfurt were dressed for carnival season but there was little to celebrate. The DAX was also slightly down after hitting a seven-month high on Tuesday. Oliver Roth is from German Bank Close Brothers Seydler. (SOUNDBITE) (English) OLIVER ROTH, FROM CLOSE BROTHERS SEYDLER, SAYING: "We have seen that the markets were already expecting a solution in Greece. So far some of the investors are thinking that this is the end of the rally. On the other hand, we can see some rising in the spreads of Portuguese bonds and therefore we are a little bit concerned about a second Greece in Portugal." Greece may be able to pay its bills for the time being. But many investors now fear Portugal could be next in line for a second bailout. Their borrowing costs have soared, re-igniting fears about contagion throughout the rest of the euro zone and even beyond. Hayley Platt, Reuters.

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Greek deal fails to impress markets

Tuesday, February 21, 2012 - 02:11