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Greek shares fall for third day as euro exit fears grow

9Greek shares fell for a third day after fears that it could leave the euro intensified and the French president warned there was “little time” to reach a deal on economic reforms.
Shares on the Athens stock exchange fell by 1.3% in early trade.
That was relatively benign compared with the two previous days’ falls of 4.7% and 5.9%.
Ten-year bond yields also rose 20 basis points to 12.97%, as fears of a wider eurozone crisis loomed.
Greek bank stocks were hit hardest. The Greek FTSE bank index fell 4.5% on Tuesday, after falling 12% on Monday.
Elsewhere in Europe, the FTSE 100 in London fell 0.74% to 6660.65, while the Dax in Frankfurt lost 1.44% and the Cac 40 in Paris shed 1.32%.
On Tuesday, Greek Prime Minister Alexis Tsipras said Athens was seeking a workable, long-term deal that would end the economic crisis,
“It is crucial that we strike a viable deal,” he said. “It is crucial to end this vicious cycle and to not be forced to go to a deal which, in six months’ time, will bring us back to the same point.”
Mr Tsipras said the main factor blocking a deal was a difference between its European and International Monetary Fund (IMF) creditors over debt restructuring.
“The big contradiction is the IMF’s presence, which wants measures and a restructuring, (whereas) the others want measures but no restructuring. They want an a-la-carte IMF.”
‘State of denial’
Meanwhile, a senior member of German Chancellor Angela Merkel’s Christian Democrat (CDU) party said on Tuesday that a Greek exit from the eurozone would have to be accepted if Athens failed to present a convincing economic reform package.
Michael Grosse-Broemer, the CDU’s deputy floor leader in parliament, said: “In the event a solid reform package is not presented, then a ‘Grexit’ would have to be accepted if necessary.”
Mr Grosse-Broemer added it was up to Greece to give up its “state of denial” and move towards more reforms that creditors are seeking to unlock aid.
“I’m not so sure anymore if the Greek government is really interested in averting damage for the people of Greece,” he said.
In another development on Tuesday, the European Court of Justice (ECJ) ruled the European Central Bank (ECB) had not acted unlawfully in 2012 when it said it stood ready to buy government bonds.
Germany objected to the ECB’s announcement of a bond-buying programme, despite the fact it was never used, saying it contravened EU law.
The action of the ECB at the time helped to calm markets which, at the time, were being buffeted by one crisis after another.
‘Significant gaps’
On Monday, French President Francois Hollande warned there was “little time” to prevent Greece from leaving the eurozone adding the ball was firmly in Greece’s court.
“It’s not France’s position to impose on Greece further cuts to smaller pensions, but rather to ask that they propose alternatives,” he said on a visit to Algiers.
“We have to get to work… everything must be done in order that Greece remains in the eurozone.”
Talks with Greek and EU officials in Brussels on Sunday failed to reach an agreement that would release bailout funds to Greece.
A European Commission spokesman said while progress was made at Sunday’s talks, “significant gaps” remained.
Eurozone finance ministers will meet on Thursday, but Greek Finance Minister Yanis Varoufakis said he did not plan to present new proposals at the meeting.
“The Eurogroup [of eurozone finance ministers] is not the right place to present proposals which haven’t been discussed and negotiated on a lower level before,” he told German newspaper Bild.
Europe wants Greece to make spending cuts worth €2bn (£1.44bn) to secure a deal that will unlock bailout funds.
Greece must also repay a €1.5bn in loans to the IMF and a further €5.2bn in short term loans by the end of the month amid a growing sense that the country has simply run out of cash altogether.
But disagreements over further economic reforms have led to delays in the government receiving €7.2bn of bailout funds.