LONDON (ShareCast) - -Greek coalition leader rejects bailout terms.
-Equities fall on anxieties over Greece.
-Weak US consumer spending figures.

FTSE-100: -0.66%
Dax-30: -1.30%
Euro Stoxx 50: -1.52%
Cac-40: -1.31%
Ibex 35: -1.18%
Mibtel: -1.35%

The breakup of the European single currency area became a genuine possibility through Friday as the dreadful choice faced by the Greek people became ever clearer.

Either the debt crippled nation swallows more pain, in the form of reduced pensions, public sector job cuts and reductions in wages - but gets a €130bn bailout - or it goes bust.

The damage to the prestige and economic future of the country which hosted the Olympic games just eight years ago would be devastating.

But some of the politicians who must make this choice appear to be unable to countenance the suffering demanded by their paymasters in the Eurozone and the IMF.

George Karatzaferis, who leads the Laos party, and is a member of the governing coalition, says he cannot support the agreement presented to European finance ministers yesterday.

In their turn, the Eurozone governments say the offer made to them is unacceptable and are demanding (slightly) more cuts, but crucially written agreements that the deal offered in Brussels will not be binned after elections in April.

In other words, Greece’s “partners” in Europe simply do not trust it to deliver the swinging austerity it has promised.

The reaction on the streets of Athens has been predictable, with riots taking place during the day, but the real issue is the deadlines imposed by the Eurozone. If Greece wants its bailout it must enact the new austerity programme into law by Sunday.

That may be impossible, in which case the euro area, in its current form, will end and Greece will be cut adrift from the embrace of the club in which it has invested all its hopes and aspirations.

Set against events in Athens, the Thomson Reuters/University of Michigan index of consumer sentiment in the United States seems somewhat unimportant, nevertheless it fell to 72.5 from 75 at the end of January - a reading well below what economists had been expecting and a further downward influence on markets.

EQUITIES

The French oil company Total lost 1.37% after unveiling a $2bn reduction in planned investments for 2012

French telecoms equipment maker Alcatel Lucent rocketed 12% after forecasting an improvement in its operating margins for this year.

Commerzbank, the troubled German lender, dropped nearly 6%, a victim of the anxiety over Greece

The leading sector on Stoxx Europe 600 was technology, up 0.5% but banks, predictably, were the worst, falling 2.54% by the close.

MACROECONOMY

Italy´s industrial production grew by 1.4% between November and December (Consensus: -0.1%).

French industrial production contracted at a 1.4% on month pace in December (Consensus: -0.7%).

The French current account deficit worsened to €3.0bn in December from €2.3bn in November.

OTHER MARKETS

Front month Brent futures had fallen by 1% to $117.4 per barrel by 5:07pm in London.

At 6:19pm in Frankfurt one euro was worth 1.3186 dollars, down 0.75% on the fix.

BS

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