European Equity Futures Slump After Greek “No” Vote

Euro stumbled after a Greek vote against austerity measures has endangered its future in the single currency.

European stock index futures fell sharply on Monday, with investors trimming their exposure to riskier assets after Greeks rejected austerity measures demanded in return of a debt deal.

European leaders called a summit for Tuesday to discuss their next move after the surprisingly strong victory by the ‘No’ camp defied opinion polls that had predicted a tight contest. German Chancellor Angela Merkel’s deputy said Athens had wrecked any hope of compromise with its euro zone partners by overwhelmingly rejecting further austerity.

At 0602 GMT, futures for the Euro STOXX 50, Germany’s DAX and France’s CAC were 2.5 to 3.1 percent lower. Britain’s FTSE futures fell 1.1 percent.

The euro was down 0.8 percent at $1.1027 but above an early low of $1.0967. It lost more ground to the safe-haven yen, reaching 134.76 yen from Friday’s 136.18.

The latest reports from Greece said around 61 percent of those voting in the referendum had backed the government and rejected the bailout conditions.

Euro Under Threat

Following the outcome, calls mounted in Berlin to cut Athens loose from the currency union, raising the risk of a full-blown crisis in the euro zone.

German Chancellor Angela Merkel and French President Francois Hollande will meet in Paris on Monday afternoon as the European Union’s grand single currency project faces the biggest challenge since its inception.

Stunned European leaders called a summit for Tuesday to discuss their next move as investors fear “Grexit” could encourage anti-euro sentiment in other countries.

The ECB, which holds a conference call on Monday morning, is likely to maintain emergency funding for Greek banks at its current restricted level, sources said.

Though Greek government officials have vociferously denied any plans to issue a parallel currency, some investors suspect Athens could have no choice in the matter.