London: European shares fell in early trade on Friday, after euro zone finance ministers imposed further conditions before approving a rescue package for Greece, causing investors further anxiety about the region’s debt crisis.
Greek political leaders said they had clinched a deal on economic reforms needed to secure a second EU bailout, but euro zone finance ministers demanded more steps and a parliamentary seal of approval before providing the aid.
“We know they’re (Greece) not going to be able to fulfill the expectations and even if they do sign up for it they won’t be able to carry it out. It seems inevitable Greece is going to go to a euro lite, or exit the euro altogether,” said Justin Urquhart Stewart, director at Seven Investment Management.
“As Greece moves towards a final resolution, you’ll see some nervousness, I don’t think that’s necessarily a reason to be selling but you might sit on the sidelines and wait for the next news to come through. Use the volatility.”
At 1:37pm, the FTSEurofirst 300 index of top European shares was down 0.6% at 1,066.73 points.
The STOXX Europe 600 euro zone Banking Index, exposed to the euro zone’s sovereign debt, fell 1.9%.