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Stocks fall but no rout after Greek 'No'

Monday, July 06, 2015 - 02:05

European shares and the euro both fell on Monday after Greece overwhelmingly voted against conditions for a rescue package. But as Ivor Bennett reports, it was not the rout that many had predicted with all eyes now on the European Central Bank.

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It was never going to be a quiet morning. But it could've been a lot worse. A 1.7 percent fall in early trading for top European stocks not the rout many had expected. The euro too only stumbled - losing half a percent to the dollar. Markets had been leaning towards a yes vote. But a no, even as comprehensive as this, makes no difference to the big picture, says BGC Partners Mike Ingram. SOUNDBITE (English) MIKE INGRAM, MARKET ANALYST, BGC PARTNERS, SAYING: "It didn't really matter which way the vote went in a way, because Greece either goes soon or it goes some point in the not too distant future, effectively down to timing. A no vote on a lot of people's reckoning probably translates to something like a 70 or 80 percent chance of a Grexit." That's not the way Alexis Tsipras will see it. The Greek Prime Minister believing he'll now have a stronger hand at the negotiating table. Euro zone leaders will hold an emergency summit in Brussels on Tuesday. From France at least there are positive signs that a deal can be reached. Finance Minister Michel Sapin. (SOUNDBITE) (French) FRENCH FINANCE MINISTER, MICHEL SAPIN, SAYING: "There is a basis of a dialogue on the table but it is up to Greece to show us that it is taking this dialogue seriously and that it knows that it can stay in the euro but that decisions must be taken." The resignation of Greek finance minister Yanis Varoufakis should make things easier. But it may take more to woo Germany - one minister saying bridges have been torn down by Greece. Ultimately, what happens next could be up to the European Central Bank. Right now, they're the only ones who can stop Greece running out of money. SOUNDBITE (English) MIKE INGRAM, MARKET ANALYST, BGC PARTNERS, SAYING: "It's very difficult for the ECB to actually argue that the Greek banks that it's allowing the Greek central bank to lend to, are actually solvent given their exposure to a clearly insolvent sovereign. so they've really kind of backed themselves into a corner." Before he quit, Yanis Varoufakis said Greek banks would reopen on Tuesday. But it's a prospect that's looking increasingly unlikely.