24 May 2011

Europe's debt problems unsettle markets

8:03 am on 24 May 2011

Stockmarkets have fallen across Europe as fears grow about government debt problems in the euro currency area.

The major markets dropped by about 2% and the value of the euro fell against the US dollar.

Greece's cost of borrowing in bond markets has continued to rise steadily as expectations of an eventual default rise, the BBC reports.

Other countries also saw their borrowing costs rise as markets remain concerned that a Greek default could trigger a broader meltdown.

Spain's 10-year borrowing cost increased to 5.6% in early trading, its highest level since January, but later relented to 5.5%.

The Spanish minority Socialist government suffered its worst defeat on record at local elections held over the weekend.

On Monday, Britain's FTSE 100 was down 1.9%, Germany's Dax fell 2% and France's CAC 40 was down 2.1%.

On Wall St, stocks fell more than 1% on concerns about Europe's debt crisis and a slowdown in global industrial demand.