Renewed uncertainty over Europe's sprawling debt crisis following elections in Greece and France weighed on stock markets Monday, with the main exchange in Athens down a massive 8 percent at one stage.
New Democracy won the Greek election. However, party leader Antonis Samaras still needs to form a coalition.
If this seems like Déjà Vu, it's because it is. We were in the same place following the May election.
Does the Outcome Matter?
This go around, I expect Pasok will reluctantly cave in and form a coalition with New Democracy. The price might be high, such as demanding the much despised Antonis Samaras to step aside.
Regardless, does the outcome matter?
Will Italy stay the course with painful economic reform? Or fall back into the old habit of profligacy and inertia? These are the stakes as Italians vote in a watershed parliamentary election Sunday and Monday that could shape the future of one of Europe’s biggest economies.
Michael Pettis at China Financial Markets asks the question "Will Greece unravel by Christmas?"Pettis makes a historical case for exactly that while stating "I don’t think Europe can postpone Greece’s exit much longer." From Pettis, via Email, with Permission ....Will Greece unravel by Christmas?