Asian Stocks Down On Greek Bailout Debacle

Asian stocks fell on Wednesday and the euro declined against the dollar after an inconclusive eurogroup meeting in Brussels on Tuesday saw no further progress towards a solution for Greece.



Japan's Nikkei dropped 2.2 percent, the Hong Kong Hang Seng Index lost 4.2 percent, the Shanghai Composite Index fell 3.9 percent and the Seoul Kospi was off 1.08 percent. U.S. stocks finished slightly higher, after a high-volume selloff in the morning.



The euro slipped to about 1.09 against the dollar after the eurogroup meeting, then bounced back to 1.11 in early morning trading, only to slip back to the 1.09 level on Wednesday morning.



Greek Prime Minister Alexis Tsipras is to address the European Parliament on Wednesday. He is expected to submit a request for a short-term bridge funding package, and a new two-year rescue package. Creditors will consider these at another eurogroup meeting on Wednesday.



German Chancellor Angela Merkel has already said that no bridge funding rescue would be possible.



On Tuesday, the Eurogroup heard a presentation from new Greek Finance Minister Euclid Tsakalotos, who had no written brief prepared for the meeting.



The reaction from eurogroup finance ministers was largely that they needed to know more before making a decision.



Eurogroup head Jeroen Dijsselbloem warned after the meeting that little time was left, and that much more needed to be done.



Greece has been given a deadline of five days, through to Sunday when another emergency summit of European leaders will be held, to reach an agreement.



Unless an agreement is reached, Greece is set to default on a €3.5 billion ($3.8 billion) bond redemption payment to the European Central Bank due on July 20. Such a default would mean that Greek banks would have no funds left and the Greek government would be effectively forced out of the euro, obliged to fund its banks with IOUs.



There are reports in the Greek media that such IOUs are already being prepared.



Banks have been closed in Greece for more than a week, while ATMs will only permit withdrawals of €60 each day. - Ankara