Stocks on the Athens bourse fell sharply and the premium demanded by investors to hold Greek bonds widened yesterday after Prime Minister Costas Karamanlis’s decison to call early elections fueled concerns of delays to government efforts to revive the economy. The Athens bourse’s benchmark general index ended 2.57 percent lower at 2,414.21 points, trimming mid-session losses of some 4 percent. The drop was the worst among 90 world equity indices tracked by Bloomberg, the news agency said yesterday. European bourses closed mostly lower, with losses on major equity markets ranging between 0.35 percent to 0.55 percent. Losses in Greece’s state-run companies, such as Public Power Corporation (PPC) and betting company OPAP, were the largest due to concerns that a new government may replace senior management, raising uncertainty about business plans. PPC, in which the state owns 52 percent, fell 6.52 percent to 15.05 euros and OPAP shed 2.65 percent to 16.50 euros. Other companies to which the government appoints top management are National Bank and Hellenic Postbank. Shares in National, the country’s largest company based on capitalization, fell 3.44 percent to 22.20 euros and Hellenic Postbank gave up 5.30 percent to 4.82 euros. Turnover in Athens was high, jumping to 375.90 million euros from 213 million euros on the previous session. The uncertainty faced by some companies, along with poor clarity of the economic policies of a new government, is weighing on capital markets, said a broker. On the fixed-income front, the premium demanded by investors to hold 10-year Greek government bonds over benchmark German Bunds yields widened to 144 basis points yesterday from 135 basis points on Wednesday. This has risen by around 30 basis points since the start of the week. Bond traders said the markets had discounted news of the early elections due to the circulation of rumors since Monday. No matter which government is elected next month, investors will expect it to pursue a restrictive economic policy, said one senior bond trader. Greece’s budget deficit may reach as high as 5 or 6 percent of gross domestic product this year, due to the slowdown weighing on tax revenues and an expenditure overshoot. Government plans frozen A number of recent government announcements that will favor investors, taxpayers and homeowners have been put on hold and may never be implemented due to early elections having been called. With Parliament being dissolved due to the elections, decisions made by different ministries, such as the simplification of procedures needed to set up a company, as announced by the Development Ministry, have not reached lawmakers to be voted into law. Other steps recently announced but not implemented in time include the suspension of forced property auctions by banks for customers who owe less than 200,000 euros. Businesses looking to get a liquidity boost by the Economy and Finance Ministry’s recent decision to change the way value-added tax is paid have also been left in the lurch. Motorists, however, will be happier, as the conservative government did not manage to present to Parliament in time its decision to increase car registration fees as of next year.