May 16 - Fears that a Greek exit from the euro zone will worsen the debt crisis facing other European nations is gripping financial markets, sending shares and other riskier assets lower as investors shift funds into safe havens like the U.S. dollar. Ciara Sutton reports.
A sea of red was cast over European markets in early trade as investors feared contagion could be unleashed by a Greek exit from the euro zone. Key indices all posted losses as panic over the country's political and financial crisis sapped risk appetite, and sent the euro to a four month low. The FTSEurofirst 300 index fell over half a percent and Spain's IBEX 35 and Italy's FTSE MIB were also down. Francois Chaulet, asset manager at Paris-based Montsegur Finance, says saving the Greek economy is a case of political will. (SOUNDBITE) (French) MONTSEGUR FINANCE ASSET MANAGER FRANCOIS CHAULET SAYING: "It was said yesterday that we need to lend a helping hand to the Greek economy. That means showing that the euro zone is able, assuming there is the will in Greece, to come to the aid of a country which - we mustn't forget - generates annually two percent of the wealth in Europe." Shares on Germany's DAX index opened down more than one per cent continuing previous losses. Robert Halver from Baader Bank says financial markets are losing patience. (SOUNDBITE) (German) ROBERT HALVER FROM BAADER BANK, SAYING: "There is a fear that the Greeks are out of control and that the parties are polarising, that they will win the upper hand and then they will say, we are not paying the money back. This would affect all of the financial markets because an uncontrolled situation in Greece is not good. " Many would say that's an under-statement. Europe's sell-off followed a similar one in Asia - shares dropped more than 3 percent - the biggest one-day fall in six months. Ciara Sutton, Reuters