European shares retreat on delay in crucial Greece bailout
16 Feb 2012
European shares retreated and the euro eased to a 3-week low today as a delay in a decision on a crucial bailout for Greece spooked investors and stalled the rally for riskier assets like equities that had marked the start of 2012.
A three-hour teleconference between euro zone finance ministers late yesterday failed to resolve all the issues surrounding a second aid package for Athens, with the decision in the matter being deferred until 20 February.
Although investors still broadly expected a deal to be concluded, suggestions that the EU was looking at ways to cut back on the support it provided to Greece indicated Athens had exhausted its reserves of goodwill with its European partners.
Meanwhile, the euro dropped 0.5 per cent to $1.2997 and could be heading for its mid-January low of $1.2624, according to analysts.
The rising risk aversion lifted the safe-haven US dollar, with the dollar index DXY hitting a three-week high of 80.078 with the greenback rising to a 3-1/2 month high of 78.79 yen.
Retuers, quoting unnamed sources, said euro zone finance officials were now examining ways of delaying part or even all of the second bailout programme, even if a deal was agreed on Monday, while still avoiding a disorderly default.
