AP and AFP
LONDON/HONG KONG — European stocks inched up Monday morning in spite of investors’ lingering concerns that the G-8 leaders had failed to provide a concrete plan to solve the European debt crisis.
Traders both in Europe and Asia were kept on edge by worries about the economic future of Greece and whether it would exit the 17-country euro currency union.
“The defensive mood among market participants is unlikely to change soon,” UniCredit said in a morning note, adding that the impending election in Greece will likely be the market driver over the next four weeks.
Anti-bailout political parties made gains in general elections in Greece earlier this month, but the ballot proved to be inconclusive. A new vote is scheduled for June 17, and the radical left party Syriza is expected to make gains. Without the rescue package, Greece will likely default and leave the eurozone. That would mean a financial disaster for Greece, but it will also send shockwaves throughout Europe.
At stake is a multibillion-euro bailout that Greece urgently needs to stay solvent. International lenders have threatened to cancel the package if Greece fails to follow through on its austerity plans.
Britain’s FTSE 100 index gained 0.5 percent at 5,294.67 points, Germany’s DAX added 0.6 percent, to 6,311.85 while France’s CAC-40 added 0.7 percent to 3,028.14.
A weekend summit in Washington among leaders of the world’s most powerful nations provided little in the way of encouragement for investors already nervous about the political turmoil in Greece.
Leaders of the world’s major economies issued a joint statement, but left the actual steps to individual countries to take.
“The G-8 statement offered little more than the usual papering cover the cracks with a series of good intentions, but no hint on concrete measures on growth or how they would be financed,” Marc Ostwald, a London-based strategist at Monument Securities, said in a morning note to investors.
European officials signaled Monday that there’s still no consensus among them about possible ways out of the European debt crisis. Germany’s deputy finance minister said Monday that Berlin still opposes the new French president’s idea to jointly issue bonds for the eurozone which could be used to fund economic growth. Germany argues that such bonds would lessen pressure for heavily indebted countries to get their financial house in order.