U.S. equities are falling in early morning Monday trading on growing concerns that Greece’s political system may not be able to form a new coalition party following the Greek elections on May 6th which failed to gain enough support to install a new government.
Greeks voted to keep their largest parties, Socialist and New Democracy, from receiving a majority which jeopardizes the chances for Greece to keep a new government that supports EU austerity measures and remaining in the Euro zone.
Syriza, a leftist party that is outright committed to rejecting EU imposed austerity measures and accepting Europe’s conditional bailout package, received the second largest votes during the May 6th election.
Yesterday the Syriza party led by Alexis Tsipras, rejected a new proposal to form a new coalition government.
If there is an impasse with Greek coalition efforts to form a new government, it will force new Greece elections in June. Meanwhile, the latest opinion polls in Greece shows the Syriza Party is growing in popularity throughout Greece and may become the largest party if Greek elections were held today.
The prospect of Syriza receiving majority support is scaring investors who are increasingly concerned about how political disunity in Europe may cause a roadblock for full participation in the Euro zone and result in more contagion.
Spanish demonstrations took place over the week-end, critcizing EU imposed austerity measures. The demonstrations occurred in Barcelona and eighty other cities in Spain.
Over the week-end, five EU central bank officials spoke about the possibility of Greece leaving the Euro-zone.