Possible Greek exit hits Dow hard
Reuters reported today that the Eurogroup Working Group on Monday told eurozone countries to prepare contingency plans in case Greece exits.
Greek government officials have said that they will run out of money in two months, but have not taken austerity measures required by two previous bailouts. If Greece votes in anti-bailout candidates in a June 17 parliamentary election, there is a good chance the country will leave the euro.
European banks that have helped other countries in debt, like Spain and Italy, have a lot vested in Greece and could see major losses, according to Bloomberg.
Officials with the German Bundesbank said a Greek exit is worrying but could be manageable, according to Reuters.
Trouble in the Eurozone affected the U.S. economy, with the Dow dropping 161 points despite a Commerce Department report that showed housing sales increased in April.
“Uncertainty surrounding Greece’s membership in the euro and possible contagion into other countries plagued by high deficits just isn’t going away, at least not until Greek elections have taken place on June 17th,” said Markus Huber, head of German sales trading at ETX Capital, in an interview with Bloomberg.