Shares of the Global X FTSE Greece 20 ETF (NYSEArca: GREK) are sinking again on Monday and Greek bond yields are surging as global markets digest news that Prime Minister Alexis Tsipras continues to challenge creditors with the end of a current funding plan for Greece looming on Feb. 28.

Greece’s benchmark ASE Index sank nearly 5% while an index of the country’s bank stocks incurred another double-digit loss. In late January, Alpha Bank, National Bank of Greece and Piraeus Bank, among others, plunged more than 25% after the radical Syriza party emerged victorious in Greek elections, news that prompted a spike in Greek bond yields. [Greece ETF Sinks as Bond Yields Surge]

The financial services sector accounted for about 32.6% of GREK’s weight at the end of the fourth quarter, according to Global X data.

In a speech before the Greek parliament Sunday, Tsipras roiled global markets by “saying he still plans to ditch an existing funding plan that ends on Feb. 28 and instead seek a stopgap agreement to ensure the country’s financing until June,” reports Eshe Nelson for Bloomberg.

That hardline approach comes just days after Standard & Poor’s pared its rating on Greece’s sovereign debt to B- from B. The ratings agency is keeping the long- and short-term ratings on Greece on CreditWatch with negative implications. Greece’s B- rating is just one notch above CCC, a rating that implies vulnerability to nonpayment “and is dependent upon favorable business, financial, and economic conditions for the obligor to meet its financial commitment on the obligation,” according to S&P, scenarios that Greece is unlikely to meet in the near-term. [Greece ETF Stung by S&P Downgrade]

GREK’s woes (the ETF has plunged 15.3% year-to-date) are affecting ETFs tracking the others PIIGS nations. For example, the iShares MSCI Spain Capped ETF (NYSEArca: EWP) is down 1.2% today, trading just 3% above its 52-week low while extending its 2015 decline to 5.3%. The iShares MSCI Italy Capped ETF(NYSEArca: EWI) is off nearly 1.3% as bond spreads in both countries are creeping higher.

“Portuguese bond spreads are 16bps wider and Spanish and Italian bond spreads are 12bps wider – their worst day in almost 4 months – as it appears Grexit fears are starting to creep into the rest of the periphery,” according to ZeroHedge.

While a “Grexit” has been framed as a negative for the Eurozone, in particular the peripheral nations, some market observers believe the opposite is true.

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