Global market scenario has been very negative because of the happenings in Greece. Market in France and Germany opened at 4.4% low. Portugal’s stock market opened at around 6% low. Spain’s market also opened at more than 5% low. Britain’s market opened at only 2% low, which was able to resist to the market forces somehow. The impact was also felt in the Asian markets. Japan’s market closed at 2.9% low. Also the US markets closed low.
European leaders are facing tough times. The trigger for rapid escalation in the crisis was because the Government decision to pull out negotiators out of bailout talks. Banks in Greece didn’t open on Monday and there were also limits on ATM withdrawal. Greece has a deadline on Tuesday when it has to make loan payment to IMF and it is almost certain to default.
Greece is the weakest member of the Euro and it may not be a large economy but there have been global implications of Greece failing to pay debts, but it has been having high exposures if debt Experts say that global markets shall continue to fall for a few days.
Milton Freedman, who was always known for his free market political views predicted in 1997 regarding this. He had cited his prophecy within a few words. His prophecy speaks regarding the diversity in Eurozone and the inability to trade freely across the zone.
Global investors are now looking for the days yet to come and they are expecting this not to turn out the same as it did in September 2008 Subprime Crisis which led to the fall of Lehmann Brothers.