Greece has pitched the European community back into the economic abyss after announcing snap general elections.
After failing to elect a new president by just 12 votes for a majority, the country will now go to elections early next year. Parliament is expected to be dissolved within 10 days and a date for elections set no later than early February.
The instability on the political plane caused Greece stocks to fall by 8 percent.
However, fears abound that the elections could well usher in a populist Leftist Party SYRIZA who will seek to re-negotiate the country’s sovereign debt with the EU.
The forex community is now waiting with baited breath to see any spillover into the financial markets, such as a kickback onto Cypriot banking system.
Further instability could spread like wildfire to other under pressure EU states as well, bringing more instability to the financial arena.
Polls suggest SYRIZA could grasp control of the Greek parliament – pushing the Athens Stock Exchange down 32 percent over the last year.
That was reflected in trading on Monday, with the session closing at 756 points – somewhat distant of recovery highs of about 1,380 points.
The IMF said Monday: “Discussions with the Greek authorities on the completion of the 6th review of the program that is being supported by an Extended Arrangement will resume once a new government is in place, in consultation with the European Commission and the European Central Bank.
“Greece faces no immediate financing needs.”