UPDATE: Greek Stock Market Plunges After Reopening, Bailout Talks Continue

ATHENS (Alliance News) – The Greek stock exchange opened Monday after a month and immediately plunged by just under 23% as the government continued talks with Greece’s international creditors.

The president of the Hellenic Capital Market Commission, Costas Botopoulos, told Skai television that he had expected heavy losses on the first day of trading after such a long closure.

“The stock exchange … will come under pressure. This will also be the case for the banks given the fact that they have to be recapitalized,” Botopoulos said.

The government has imposed certain restrictions: Investors who have money in Greek banks can only buy stocks and shares with funds from outside the country or with cash, Botopoulos said.

The stock market was closed as part of the capital controls imposed by the Greek government on June 29 to prevent money from fleeing the country and a collapse of the banking system.

Greeks have withdrawn billions of euros from their accounts since then over fears of a banking crash.

The reopening of the stock exchange came as the government continued talks with the EU, the European Central Bank, the European Stability Mechanism and the International Monetary Fund, focussing on tax reforms.

Greece is trying to secure an 86-billion-euro bailout to try and save its faltering economy. Athens must make a debt payment of 3.2 billion euros to the ECB on August 20.

One of the EU’s top economy officials sounded a positive note on the talks in an interview published in the newspaper Ethnos on Monday.

“I am encouraged by the progress made so far. We are moving in the right direction,” EU Economy Commissioner Pierre Moscovici said.

“It is still too early to draw firm conclusions at this stage, but the constructive collaboration at the technical level should now allow the negotiations on a new three-year programme to progress rapidly,” he said.

“Greek citizens need a perspective for the future. Businesses need a stable regulatory environment. Investors need legal certainty. The reforms in the [bailout] programme provide answers to all these challenges. At the end of the day, the purpose is to make Greece stand and walk on its two strong feet again,” he said.

Officials did not want to be drawn into commenting on the stock exchange. Speaking to journalists in Brussels, European Commission spokeswoman Mina Andreeva said: “The European Commission takes note of the decision by the competent Greek authorities to reopen the Athens stock exchange on August 3, and we have no comment on any market developments, as usual.”

Meanwhile, rail services were severely reduced for several hours on Monday as workers staged a strike over plans to privatize the rail company. Privatization was expected to top the bailout talks agenda on Tuesday.

Doctors also started demanding that patients pay them in cash in protest at not being paid for months by the heavily indebted healthcare provider EOPYY.

“We have not been paid since February. That’s 8 million euros (8.8 million dollars) a month,” Giorgos Eleftheriou, president of the association that represents Greece’s 8,000 public doctors, told Greek news website protothema.gr.

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