European Shares Fall On Greek Euro Exit Fears

Shares in Europe's main stock markets have plummeted after political uncertainty in Greece cast doubt over the debt-laden nation's future membership of the euro.

Stocks on Britain's FTSE 100, France's CAC and Germany's DAX all tumbled on Monday morning, while shares in Greece's banks fell by as much as 7%.

The financial markets took fright after talks to form an emergency coalition government in Athens suffered another set-back when a radical leftist leader spurned an invitation from the Greek president for more discussions.

As the political deadlock continued, investors feared the Greek crisis would spread and speculation of a Greek exit from the single European currency mounted.

Natasha Roumantzi, head of analysis at Piraeus Securities, attributed the radical drop in Greek bank shares to "the political uncertainty and the ongoing statements from Europe about the risk of Greece exiting the euro".

The market turmoil came after Britain's business secretary, Vince Cable, warned that a "massive economic impact" awaits Britain if the crisis is not contained.

In Greece, the far-left group Syriza has refused to attend today's discussions with President Karolos Papoulias, who is anxious to persuade political leaders to form a coalition government after elections a week ago failed to produce a clear winner.

Syriza leader Alexis Tsipras says his party will not support the country's bailout from the EU and International Monetary Fund ( IMF ), which has seen billions of euros in loans given in return for severe spending cuts.

But that could lead to Greece defaulting on its debt and leaving the euro altogether.

The political stalemate has raised the prospect of fresh elections in Athens next month.

There are now seven parties in parliament, none with more than 19% of the vote, but polls show increasing support for the anti-bailout, anti-austerity parties.

Shavaz Dhalla, a financial trader at Spreadex, said: "It now seems that new elections in Greece are inevitable as Syriza hopes to build on the popular distaste of austerity measures and pioneer a government which could potentially offer a referendum to the public over the supposed draconian austerity measures imposed by ECB [European Central Bank] officials...

"A potential return for the Drachma, but a catastrophe for the rest of Europe."

The issue will be high on the agenda when eurozone finance ministers meet later today in Brussels.

Ahead of the summit, the German finance ministry warned that Greece must respect the terms and timetable of its reform programme, agreed as part of the EU-IMF bailout, as the "only and right" way out of its debt crisis.

Greece is committed under the accord to finding another 11.5bn euros (£9.2bn) in savings over the next two years and needs to repay 435m euros (£349m) in maturing debt on May 15.

Worries over the instability of Greece as well as the poor health of Spain's banking sector have also impacted currency and bond markets.

Analysts fear that Spain - whose 10-year government bond yields have hovered around 6% since mid-April - and its faltering banking sector will soon require bailing out.

On Tuesday, Germany's Chancellor Angela Merkel will meet France's new socialist president Francois Hollande in Berlin for the first time, aiming to bridge differences over economic policy.

Amid growing discontent among eurozone voters with governments which stress cuts to stabilise public finances at the expense of growth, Ms Merkel and her hardline support for austerity, are under pressure after a poor regional election result at the weekend.

©Sky News

Greek parties fail to form a government

Greek Socialist Leader (l), seen here with Greek President Karolos Papoulias said he retained "existing but limited' optimism for a deal Credit: AP Photo/Aris Messinis

Critical last-ditch talks to form a coalition government in crisis-struck Greece floundered once more today, leading the country one step closer to new elections.

Greek President Karolos Papoulias convened the heads of the parties that came in the top three spots in last Sunday's inconclusive elections, in an ultimate effort to broker an agreement after a week of talks led to deadlock.

The meeting ended without a solution, but the process continued this evening with the president meeting individually with the leaders of smaller parties that made it into parliament.

©ITV News

Hollande: My Win Is A Rejection Of Austerity

French President-elect Francois Hollande has told tens of thousands of cheering supporters that his victory was a rejection of austerity measures as the answer to the euro crisis.

The 57-year-old won 51.6% of the vote in the presidential run-off, unseating Nicolas Sarkozy after a fractious campaign in which rising unemployment and the faltering economy were the key battlegrounds.

After hearing the news in his political power base of Tulle, Mr Hollande travelled to Paris to address his supporters in the symbolic heart of revolutionary France.

"In all the capitals... there are people who, thanks to us, are hoping, are looking to us, and want to reject austerity," he shouted above the din.

"You are a movement lifting up everywhere in Europe, and perhaps the world."

Certainly the world has taken notice: he received congratulatory telephone calls from Germany's Chancellor Angela Merkel, US President Barack Obama and British Prime Minister David Cameron.

Mr Hollande's first official foreign trip will be to Berlin for a meeting with Ms Merkel after his inauguration on May 15.

The German Chancellor said on Monday she would welcome the President-elect "with open arms".

She said they agreed during a phone call to work "well and intensively" together, adding: "Franco-German co-operation is essential for Europe and we all want Europe to succeed."

Observers agree that Mr Hollande's election represents a sea-change in the governance of the eurozone and the management of the single currency crisis.

Under the outgoing presidency, France and Germany led an austerity drive to enforce budget discipline across the 17 single currency nations.

Now Mr Hollande is vowing to amend their signature compact - agreed in principle by all EU nations except the UK and the Czech Republic - to include an enhanced commitment to growth.

Tears streamed down the faces of many supporters of Nicolas Sarkozy at the UMP's makeshift headquarters at the Maison de la Mutualite in central Paris, as he conceded defeat.

"I bear responsibility... for the defeat," he said. 

"I committed myself totally, fully, but I didn't succeed in convincing a majority of the French. I didn't succeed in making the values we share, win."

He stopped short of retiring from frontline politics but indicated he would not lead his party into this summer's legislative elections, in which parties previously on the political fringes may make gains.

One of those groups is the Front Nationale led by Marine Le Pen, who took nearly one-fifth of all the votes cast in the first round.

She was withering of both candidates after the result.

"So Hollande has arrived with promises of big projects. Like Nicolas Sarkozy, first he will let down his supoprters and then he will let down the whole of France," she said. 

But the Socialists are hoping their success in the race for the Elysee Palace will presage a tighter control over the entire political landscape of France.

The party already runs most municipalities and the Upper House, called the Senate, so a majority in Parliament would constitute a challenge to the centre-right administrations in most of Europe's major industrialised economies.

Greece Elections: Greek main parties 'suffer big losses' at polls

Greeks angered by a vicious and protracted financial crisis punished their two main parties in national elections today, with exit polls projecting them both hemorrhaging support and no party gaining enough votes to form a government.

The conservative New Democracy party appeared the most likely to win the top spot, while the extreme right-wing Golden Dawn seemed set enter parliament for the first time, gaining several seats -  a meteoric rise for a party on the fringes of politics until a few months ago.

Days of talks are likely to ensue as parties attempt to hammer out a governing coalition.

The election will determine the country's course after years of austerity measures that have outraged voters but which were critical in convincing international creditors to extend Greece billions in loans to keep its debt-saddled economy afloat.

Greece is heavily dependent on billions of euros worth of international rescue loans from other European countries and the International Monetary Fund, and must impose yet more austerity measures next month to keep the bailout funds flowing and prevent a default and a potentially disastrous exit from the group of nations that use the euro currency.

According to updated exit poll figures an hour and a half after polls closed, New Democracy was projected to win 19-20.5 percent, followed by the leftist Radical Left Coalition, or Syriza, with 15.5-17 percent. The formerly majority socialist PASOK party was projected in third place with 13-14 percent.

"The truth is here, the reality of this result is that at the moment this produces no government," outgoing deputy prime minister and senior PASOK official Theodoros Pangalos said. "It is not a question at the moment of who gets a little more or a little less." Initial official results with 14.4 percent of the vote counted showed New Democracy with 21.2 percent, Syriza with 14.99 percent and PASOK plunging to 14.83 percent.

The outcome is a devastating blow to PASOK, which won a landslide victory in the last parliamentary elections in 2009 with more than 43 percent. PASOK, along with New Democracy, have dominated Greek politics since the fall of the seven-year dictatorship in 1974.

"This is a major political earthquake, that has devastated PASOK," senior New Democracy official Panos Panagiotopoulos said. "New Democracy remains the first party but has a very low support number. It is an explosion of anger and despair. The fallout has affected many parties fairly and unfairly." 

Thirty-two parties were vying for the support of nearly 10 million registered voters, many of whom were undecided on the eve of the election.

Golden Dawn, which has vowed to kick out immigrants and mine Greece's borders with Turkey, was predicted to win between 6.5-7.5 percent, well above the 3 percent needed to enter parliament. If borne out by official results, it will be a stunning result for a party that won just 0.23 percent in the 2009 elections.

"Greek citizens should not fear us, the only ones who should fear us are the traitors," Golden Dawn leader Nikolaos Michaloliakos told The Associated Press.

Whichever party wins the most votes will get a bonus of 50 seats in the 300-member parliament. But with percentages so low and between seven and 10 parties projected to enter parliament, that will not be enough to form a governing majority of 151 seats.

The first party will be given a mandate to form a coalition, and will have three days for negotiations. If it fails, the mandate will go to the second party for a further three days, and then on to the third party.

If no coalition emerges, the country will have to have another election, a prospect which has alarmed Greece's international creditors.

New Democracy and PASOK were uneasy coalition partners in a temporary six-month power-sharing deal forged last November following a political crisis that saw former PASOK head George Papandreou resign as prime minister. In 2009, Papandreou had led his party to a landslide election win, earning 43.92 percent of the vote.

Before the election, New Democracy head Antonis Samaras had vowed not to form a coalition with its socialist rivals, saying such a prospect would require too much haggling to be effective. However, it was not clear how he would react to the official result.

Rare 'Super Moon' Lights Up Skies Overnight

A so-called super moon is set to light up the sky overnight, bringing a lunar spectacle for amateur and professional astronomers alike.

Super moons happen when the satellite's closest approach to the Earth during its orbit - known as perigee - coincides with a full moon.

The "perigee moon", as it is known scientifically, is as much as 14% bigger and 30% brighter than other full moons this year, says Nasa Science .

During this week's perigee - the closest point of orbit - the moon will be 221,801 miles from Earth.

The close approach will happen within minutes of the official full moon phase at 4.35am BST.

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The moon line up with the Earth and the sun makes it appear brilliantly full.

The super moon is a term coined in 1979 and will also cause high and low tides to be slightly more extreme than usual.

But astronomers say there is nothing to fear - super moons are about picturesque moments and are not a threat to the planet.

"While we know that during new and full moons the tides are greatest - and if it's in concert with a storm surge it might produce unusual flooding - there is no scientific evidence that earthquakes and other natural disasters are connected," Geza Gyuk, an astronomer at the Adler Planetarium in Chicago, told National Geographic.

"Super moons have been happening for billions of years, and nothing particularly special occurs on these dates - except, of course, for a beautiful full moon."

The last super moon occurred in March last year, and was about 250 miles closer than this year's event.

Sky News weather producer Chris England said most places in the UK will enjoy clear spells overnight - except southeast England and central Scotland, which will be cloudy.

Japan switching off final nuclear reactor

A Japanese power firm began switching off the country's last working reactor, leaving it without nuclear power just over a year after the world's worst atomic accident in a quarter of a century.

As technicians close down the No. 3 unit at Tomari in Hokkaido, the debate over whether Japan needs nuclear power has been reignited, amid increasingly shrill warnings of summer power blackouts.

Hokkaido Electric Power, which runs the plant, said they started inserting control rods at 5:00 pm (0800 GMT) that would halt the chain reaction and bring the reactor to "cold shutdown" some time on Monday.

"Power output started declining at the No. 3 unit," said Tomohiko Shibuya, a Hokkaido Electric Power spokesman. "We have not heard of any trouble so far. Power generation there is scheduled to stop completely in about six hours."

The shuttering will mark the first time since the 1970s that resource-poor and energy-hungry Japan has been without nuclear power, a technology that had provided a third of its electricity until meltdowns at Fukushima.

The tsunami-sparked disaster forced tens of thousands of people from their homes in an area around the plant -- some of whom may never be allowed to return.

It did not directly claim any lives, but has devastated the local economy, leaving swathes of land unfarmable as radiation spewed from the ruins.

With the four reactors at Fukushima crippled by the natural disaster public suspicion of nuclear power grew, so much so that no reactor shut for routine safety checks has since been allowed to restart.

"A new (era in) Japan with no nuclear power has begun," said Gyoshu Otsu, a 56-year-old monk who joined a protest against nuclear power in front of the industry ministry in Tokyo which supervises the nation's power utilities.

"Generating nuclear power is like a criminal act as a lot of people are still suffering," said Otsu wearing white Buddhist clothes. "If we allow the situation as it is now, another accident will occur."

Protest organiser Masao Kimura said: "It's a symbolic day today. Now we can prove that we will be able to live without nuclear power."

Separately, some 5,500 demonstrators staged a rally at a park near Tokyo Tower and later marched through central Tokyo carrying banners, which read: "Sayonara (Goodbye), nuclear power."

"We have to take action now so that Fukushima should be the last nuclear accident not only in Japan but all over the world," Mizuho Fukushima, head of the opposition Social Democratic Party, told AFP during the rally.

But Hiroomi Makino, the pro-nuclear mayor of Tomari, which hosts the reactor, said: "It's so regrettable. I would like the company to resume operation as I believe that they will give the highest prority to safety."

When generation stops late on Saturday, Japan's entire stable of 50 reactors will be offline, despite increasingly urgent calls from the power industry and bodies like the OECD, who fear dire consequences for the world's third largest economy.

Last month, Kansai Electric Power, which supplies mid-western Japan, including the commercial hubs of Osaka, Kyoto and Kobe, said a hot summer could see supply fall nearly 20 percent short of demand.

Kyushu Electric Power, covering an area further west, as well as Hokkaido Electric Power also said they will struggle as air conditioning gets cranked up in Japan's sweltering summer.

Kansai Electric last month booked a $3 billion annual loss, turning around a $1.5 billion profit the year earlier on the increased cost of using previously mothballed thermal fuel plants.

A week earlier, Prime Minister Yoshihiko Noda's government gave the green light to restarting reactors at the Oi nuclear plant, run by Kansai Electric, but regulators still have to convince those living near the plant.

In order to be fired up again, reactors must now pass International Atomic Energy Agency-approved stress tests and get the consent of their host communities -- it is this last hurdle that is proving hardest to overcome.

Critics of nuclear power say Japan has managed thus far with its ever dwindling pool of reactors and need not look back.

Environmental campaign group Greenpeace said Friday the country should concentrate on ramping up renewables and boosting energy efficiency.

©AFP