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Varoufakis’ Resignation, Greeks’ ‘No’ Raise Market Uncertainty

After Greece's 'No' vote, Stock markets went down. (Image: Katrina.Tuliao, Wikimedia)
After Greece's 'No' vote, Stock markets went down. (Image: Katrina.Tuliao, Wikimedia)

After Greece gave a big ‘No’ to further austerity measures, market investors became even more uncertain.  While the thousands of ‘No’ campaigners celebrated the results in Athens, the euro slowly plummeted downward, and the markets became even more uncertain.

The euro was trading at $1.1114 on Friday, but as of 5:10 GMT, the euro sank to $1.1012 on Monday. The news that Varoufakis is leaving his post made the euro gather even more drive, trading at $1.1069 at 5:55 GMT, picking up just a little. Still, the euro currency lost half a percent on Monday against the U.S. dollar.

The French CAC 40 as been the worst performer in the EU so far, losing 1.3 percent on Manday as of the 9:55 EST. However Asian stocks Hang Seng (Hong Kong) and Nikkei (Japan) indexes have suffered the most on the Greek referendum news.  The Hang Seng stopped trading with a 3.18 percent loss, and the Nikkei closed with 2.08 percent fall.

After insuring a ‘No’ vote at the Greek referendum on bailout, Finance Minister Yanis Varoufakis resigned, apparently because it would help Prime Minister Alexis Tsipras negotiate a better deal with foreign creditors.

“Soon after the announcement of the referendum results, I was made aware of a certain preference by some Eurogroup participants, and assorted ‘partners’, for my… ‘absence’ from its meetings; an idea that the prime minister judged to be potentially helpful to him in reaching an agreement. For this reason I am leaving the ministry of Finance today,” he said on Monday in a blog statement.

According to RT news, quoting a diplomatic source in Brussels, Varoufakis had “tense relations with individual members of the Eurogroup in the past several weeks, primarily with the body’s president.”

As of today, the new Finance Minister is Euklidis Tsakalotos. He will lead the talks for Greece with international creditors in Bruessels.

“No simple answer and no simple question.” The Greece referendum document  is even difficult to understand for economists.

What people want to know is whether the banks will open or not. Will the economy stay the way it is, or will it go back to one where you can borrow? Will this situation stay in the euro?

It is still not known whether Greece will exit the euro or not.

A ‘No’ vote ‘doesn’t necessarily mean anything more than further discussions and more uncertainty.’

It doesn’t mean euro exit at all”, the global head of fixed-income research at HSBC Steven Major told Bloomberg.

On Tuesday, euro zone members will hold an emergency summit after German and French leaders called for a meeting. They will talk about the Greek referendum results.

The tables on talks with Greece have been turning for so long that it would be no surprise if most participants were dizzy by now.

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