Markets in spin as anti-bailout party rises in Greek polls and Spanish borrowing costs soar

Madrid government forced to deny plan to bail out troubled bank with state cash

Alasdair Fotheringham
The Independent [UK]
31 May 2012

A day after markets in Europe were calmed on news that Greece’s pro-bailout New Democracy party appeared to be pulling clear in the polls ahead of next month’s crunch general election, new polls yesterday threw the situation back into doubt after suggesting the vote was back on a knife-edge.

Three new polls painted a confusing picture of what might happen in Greece, ahead of next month’s election, which may decide whether or not Greece remains in the euro.

Of three polls published, one showed Greece’s biggest pro- and anti-bailout parties, New Democracy and Syriza, in a dead heat, Reuters reported. Another put New Democracy ahead and a third suggested that the leftist Syriza party would win if elections were held now. The contradictory forecasts are likely to unsettle markets and politicians who fear that a win by Syriza, which has said it wants to remain in the euro but ditch the austerity measures the country has been prescribed, would force debt-laden Greece out of the single currency.

The turbulence was not restricted to Greece. The beleaguered Spanish economy took another blow yesterday as the country’s borrowing costs soared to their highest level for a decade and the Madrid stock market briefly sank to a nine-year low…

The article continues at The Independent.

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