The European financial crisis wreaked havoc on stock markets and exchange traded funds in 2011, contributing to elevated market volatility and lockstep movements in equities. Once again, the Eurozone may threaten market stability if Greece is unable to secure another accord with international creditors.
Vanguard European ETF (NYSEArca: VGK) fell over 1% on Wednesday and is down 9.2% over the past year.
On Wednesday, Greek Prime Minster Lucas Papademos stated that the country could default in March if the government does not receive another bailout deal, reports Maria Petrakis for Bloomberg.
“In mid-January, talks begin with the troika which focus on shaping a credible economic adjustment plan for 2012 to 2015,” Papademos said. “The implementation of the agreement to reduce the debt and continuation of financing of the country depends on that. Without this agreement with the troika and subsequent financing, Greece in March faces the immediate risk of a disorderly default.”
The prime minister also said that decisions made over the next few weeks will also determine whether Greece remains under the euro currency or reverts back the drachma, according to the Associated Press.
Greece will need to finalize the second international bailout of $169 billion, along with more stringent austerity measures, or face leaving the euro.