UpdateEurope chem stocks fall further on fears over Greece debt deal

10 February 2012 17:16  [Source: ICIS news]

(releads and updates throughout)

Greeks protest against austerity measuresLONDON (ICIS)--European chemical stocks continued to fall on Friday, in line with financial markets, as investors' concerns worsened that plans to solve the Greek debt crisis would fail.

At closing, the UK’s FTSE 100 was 0.65% lower than the previous close, Germany’s DAX had fallen by 1.31%, and the CAC 40 in France was down by 1.17%.

With European indices trading lower, the Dow Jones Euro Stoxx Chemicals index was down by 1.43%, as shares in many of Europe’s major chemical companies fell from the previous close.

Petrochemical major BASF’s shares had fallen by 1.53%, while fellow Germany-based chemical company Bayer’s shares were trading down by 1.74%.

Shares in Germany-based fertilizer producer K+S and chemical firm Wacker Chemie were trading down by 2.32% and 6.44% respectively.

France-based Arkema’s shares were trading down by 2.66% from the previous close while shares in Belgium’s Solvay were 2.72% lower.

On Thursday, Prime Minister Lucas Papademos of Greece reached an agreement with three coalition party leaders on new austerity measures required to secure further bailout funds, despite a reform of the pension system being a stumbling block.

However, eurozone finance ministers later set out additional measures Greece, already in deep recession, must accept in order to receive further bailout funds of around €130bn ($173bn) the country needs to avoid defaulting.

If a deal is not made it could also mean Greece potentially exiting the euro.

The Greek parliament has been asked to ratify all cuts and reforms agreed with the International Monetary Fund (IMF), the European Central Bank (ECB) and the EU by 12 February and also for Athens to find an additional €325m in budget cuts by 15 February.

Eurozone finance ministers also asked for guarantees that the deal would be implemented.

Greek politicians remain deeply concerned over the severity of the austerity measures required, while Greek unions opposed to the proposed cuts began a 48-hour strike on Friday.

Greece's deputy foreign minister Marilisa Xenogiannakopoulou resigned on Friday in protest over the terms of the reforms included in a bailout agreement, while a Greek socialist deputy labour minister, Yannis Koutsoukos, resigned on Thursday.

Four cabinet ministers from Greece's far-right Laos group also resigned, according to reports, saying the country was being humiliated by Germany.

Public anger over the reforms, which include lowering the minimum wage by 20% to €600 a month and 15,000 public-sector job cuts, has led to violent clashes in Athens.

Police have used teargas to disperse and control demonstrators armed with stones and petrol bombs, according to media reports.

($1 = €0.75)

By: Franco Capaldo
+44 (0)20 8652 3214

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