Greek stocks and bonds slumped after Prime Minister Antonis Samaras opted to bring forward the process of choosing a new head of state, risking parliamentary elections in Europe’s most indebted state as early as January.
Samaras and his deputy, Evangelos Venizelos, will meet Tuesday afternoon to discuss the political situation after the government announced that voting for a new Greek president will begin next week, on Dec. 17. Samaras will have to rely on opposition votes to push through his pick for the mainly ceremonial post. Without them, his government could fall.
“It is a high stakes gamble,” Holger Schmieding, chief economist at Berenberg Bank in London, said in an e-mailed note. “Snap parliamentary elections in January could then bring left-wing SYRIZA into power in Athens.”
The news triggered a sell off in the Greek stock market, with the benchmark Athens Stock Exchange Index falling 6.6 percent as of 11.05 a.m. Yields on Greece’s 10-year bonds rose 40 basis points to 7.64 percent.