GLOBAL MARKETS-Euro, stocks, oil slump as Greece crisis deepens

Tue May 8, 2012 1:16pm EDT

* Euro dips below $1.30, down for seventh day

* Brent, U.S. oil prices fall for fifth session

* Benchmark German yields hit record low

* Greek stock index hits near 20-year low

By Rodrigo Campos

NEW YORK, May 8 (Reuters) – The euro, oil and stocks fell on
T uesday as Greece’s political crisis intensified after a call to
form a new government renounced the terms of a bailout that is
keeping the country’s finances afloat.

The results of weekend elections in Greece and France, in
which voters soundly rejected harsh austerity measures seen by
markets as a way out of the debt crisis, heightened the
uncertainty of the path ahead for the euro zone.

Alexis Tsipras, the leader of the Greece’s Left Coalition
party, began efforts to form a government by renouncing the
EU/IMF bailout terms and threatening to nationalize banks.

The head of a centrist conservative party, which won the
most votes Sunday, said he would not back a minority government
that rejected the bailout, making repeat elections in a few
weeks increasingly likely.

If Greece does not stick to the aid package terms, it could
run out of money as soon as next month, officials estimate.

A broad measure of Greek stocks dropped 3.6 percent
to close at its lowest in almost 20 years and France’s CAC 40
lost 2.8 percent. Wall Street’s benchmark SP 500 hit a
two-month low.

The uncertainty in Europe put a bid under safe-haven assets,
sending benchmark German yields to a record low of
1.533 percent. The increased aversion to risk also underpinned
demand at a sale of Dutch and Austrian bonds.

The benchmark 10-year U.S. Treasury note was up
13/32, the yield at 1.828 percent. Yields briefly dipped below
1.82 percent, their lowest since early February, but the slide
was seen as temporary.

“Unless Europe deteriorates further from here these yields
are going to prove to be unsustainably low,” said Jim Kochan,
chief fixed-income strategist at Wells Fargo Advantage Funds in
Menomonee Falls, Wisconsin. Wells Fargo Advantage Funds has $208
billion in assets under management.


Oil prices fell for a fifth straight session on the prospect
of weaker growth on both sides of the Atlantic at a time of
ample supply from major oil producers.

Brent crude fell 1.6 percent, below $112 a barrel,
and U.S. crude lost 2 percent to trade near $96.

The euro was down 0.4 percent at $1.3009, off the
day’s low of $1.2981. The single currency traded below the key
technical level of $1.30 for a second straight session.

“Today’s euro weakness is overwhelmingly tied to Greece’s
difficulty putting together a government,” said Daniel Hwang,
senior currency strategist at in New York.

“It is an overall risk off day, however, and the euro will
likely remain under pressure due to all the political

Gold traded below $1,600 an ounce for the first time in four
months, continuing its close correlation with the euro. Spot
gold was down 2.1 percent at $1,602.76.

In afternoon trading in New York, the Dow Jones industrial
average dropped 161.59 points, or 1.24 percent, at
12,846.94. The Standard Poor’s 500 Index was down 17.96
points, or 1.31 percent, at 1,351.62. The Nasdaq Composite Index
was down 48.43 points, or 1.64 percent, at 2,909.33.

The pan-European FTSEurofirst 300 closed down 1.7
percent and the blue-chip Euro STOXX 50 index slid
2.1 percent. Global stocks as measured by MSCI
fell 1.3 percent.

“Greece is basically a zombie state right now,” said Rick
Fier, director of trading at Conifer Securities in New York.

It will be difficult for Greece to raise money to pay off
its debt, whether or not it stays in the euro zone, Fier said.
“If the euro zone is mired in recession for a while, that will
put a crimp on (the U.S. economy) as we try to expand.”

The political turmoil in Greece added to worries that
France, where President-elect Francois Hollande has also opposed
drastic spending cuts, could derail the German-led push for
austerity in Europe and trigger a new phase of the bloc’s debt

Italian benchmark yields rose 5 basis points
to 5.63 percent while the Spanish benchmark added
9 basis points to 5.86 percent.

Sunset isle Santorini tries to ignore Greek debt crisis

Twenty euros ($26) for a pair of flip-flops, 10 euros ($13) for a five-minute taxi ride and store prices that send even locals to Athens.

Welcome to Santorini, the island that forgot Greece’s economic crisis.

Voted the world’s best island by Travel + Leisure magazine in 2011, the Cyclades tourism powerhouse continues to live in an inflation bubble as the rest of the country sees salaries and pensions plummet by up to 40 percent.

The enduring boom is built on money spent by thousands of travellers who flock to Santorini by cruise ship, ferry and plane each day, drawn by the island’s whitewashed villages, volcanic beaches and jaw-dropping sunset vistas.

The island was home to a technologically advanced Bronze Age civilisation that was destroyed by a massive volcanic eruption in the 17th century BCE.

The eruption collapsed part of the island, shaping a deep caldera basin and etching steep cliffs that are Santorini’s main attractions today, in addition to the quality wines grown on the island’s volcanic soil.

The reopening of the archaeological site of Akrotiri, a Bronze Age urban centre that boasted multi-storeyed buildings, magnificent wall paintings and an elaborate drainage system, further boosts the island’s appeal.

Nearly 180,000 foreign nationals flew into Santorini last year, up 10.5 percent, and about 80 percent of all visitors are non-Greek, many of them honeymoon travellers and retired couples.

But even visitors with deeper pockets are now starting to chafe.

“I just paid $4.60 for a can of Coca-Cola, it’s the most expensive I’ve ever had in my life,” protested Denise, a 59-year-old from Rio de Janeiro on a 40-day southern Europe tour with her husband.

The Brazilian couple were fortunate. With the help of a local car rental operator, they secured a small room with a splendid view of the caldera for just $78 euros a night, bargained down from a first asking price of $221.

For most of their seven-day stay, they were the hotel’s sole guests.

Online, visitors question the island’s luxury accommodation pedigree given the state of many rooms.

“There is no question that the views here are amazing, but this is an unfortunate example of greedy, unprofessional hoteliers jumping on the ‘luxury boutique’ bandwagon and doing it on the cheap,” one traveller wrote on the site.

Most of Santorini’s hotels are currently near-empty but despite that, a double room with a caldera view can easily $395 a night, and suites are often priced at over $910.

Greece: where the Games began

A keen marathon runner (or glutton for punishment), I loved the idea of
retracing those mythical footsteps. What better than a marathon from
Marathon in an Olympic year? Yet the weaving traffic, crash barriers and
scrubby, faint footpaths suggested a serious risk of expiring prematurely,
just as in Pheidippides’s tale – but probably some way short of Athens, or
the 19th mile where Paula Radcliffe’s Olympic marathon dream perished on the
kerbside in 2004.

our full guide to Athens

As I descended towards Marathon – a workaday seaside town despite its
world-famous name – the urban landscape beat a half retreat. Pines and
vineyards peeked between the building lots, the Penteli mountain range
loomed near the roadside, and the plain, scene of the 490 BC battle,
expanded before me. But even the town’s Marathon Run Museum, a paean to the
event’s pioneers and heroes, couldn’t sway me to chase Pheidippides’s myth –
at least, not until the (car-free) official Athens classic marathon along
that route in the autumn. Greece had plenty more trails worn by ancient
athletic heroes for me to tread.

One was the finishing line of the course, the Panathenaic Stadium in Athens,
where sporting competitions in honour of Athena used to unfold. It is a
magnificent horseshoe of tiered marble, its latest incarnation the vision of
the wealthy second century AD Athenian, Herodes Atticus, a prolific patron
of public buildings.

The statue of Discobolus, outside the Panathenaic stadium

Away from the most visited part of the city, it is sometimes overlooked by
tourists, but as marathon finales go, it is one of the world’s most
glorious. It certainly was for Spiridon Louis, whose entry into the stadium
in 1896 brought 60,000 spectators – including Crown Prince Constantine – to
their feet. “Hellene, Hellene” (“It’s a Greek, it’s a Greek”) they roared,
conveniently overlooking the strong odds in favour of that outcome – 12 of
the 17 runners in that race were from Greece. Their enthusiasm for the
victorious local farmer was understandable: Louis had won the only home
athletic gold medal in the first modern Olympic Games.

It was less fevered on my visit with Heinrich Hall, an archaeologist based in
Athens, as well as an expert guide with Peter Sommer Travel. Barely another
soul was around; only two other visitors posing on the podium. Following a
worthwhile audio guide, we took a tunnel into the bowels of the stadium,
where the athletes used to prepare, and found a small, well-presented
Olympic-themed display, including torches from previous Games. (Unsure about
our “cheese grater”? Wait until you see the offering from Montreal 1976
close up.)

Once we had emerged back into the stadium as the ancient athletes used to –
the audio guide helpfully simulating the roar of the crowd – we climbed the
eastern tier for a view of the world’s most famous citadel, silhouetted by
the lowering sun. According to the work of Robert Browning, the 19th-century
poet, this was the final destination for a certain messenger: “So, when
Persia was dust, all cried ‘To Akropolis! Run, Pheidippides, one race more!
the meed is thy due! Athens is saved, thank Pan, go shout!’” (Pheidippides,

Although the verse was historically dubious, embellished from accounts by
Plutarch, Herodotus and Lucian, its timing may have proved potent. Just a
few years later, at the suggestion of the semanticist Michel Bréal to his
friend Baron de Coubertin, the so-called “father of the modern Olympics”,
organisers of the 1896 Games introduced the marathon route, and effectively
invented the modern event.

I planned my final outing in Athens as a lap of the stadium track, open in the
mornings so mortals can tread in the footsteps of classical athletes. But,
on that day, the gods were not smiling on me in my running kit – or rather,
a shaven-headed stadium caretaker wasn’t. In response to mypleas for entry,
he thrust an A4 document under my nose: yellow highlighter through
unintelligible Greek script killed my enthusiasm for the run.

The track in the Panathenaic Stadium is open to run around early in the

But Herodes Atticus has another stadium to his name, one that crowns Delphi,
the sanctuary to Apollo a few hours’ drive north of Athens. This was the
site of the Pythian Games, one of four ancient “Panhellenic Games” festivals
(see panel), including those at Olympia, held on a four-year cycle.

The omens seemed promising on arrival: a waft of honeysuckle and the tinkle of
cow bells drifted up the mountain as Heinrich and I began to wander among
the excavations. From the ruins of the gymnasium where the athletes used to
train, we wended our way up the terraces of this extraordinary site, amid
the towering crags of Mount Parnassus, which ancient Greeks believed to be
the navel of the earth.

We passed between the treasuries and monuments of rival Greek states, each
trying to outdo the last. Further towards the temple of Apollo, we passed
the ostentatious Athenian treasury where spoils from the battle of Marathon
were once displayed. Then it was up beyond the sacrificial altar to Apollo,
used by those seeking guidance from the priestesses of the Delphic Oracle.

We rose above the theatre, the former arena of lyre players, flautists and
actors who competed in the Pythian Games (the only Panhellenic Games that
had this distinct cultural element), following a distant hum towards the
stadium above. As we turned a corner we saw the source of the noise, a
generator powering a clean-up operation after a minor landslide. There was a
price to be paid for Delphi’s spectacular location. The track was cordoned
off, blocking another chance to run where the ancients had.

In Itea, where Delphi-bound pilgrims used to anchor, we found consolation in a
wonderful spread of dishes, including octopus and saganaki (fried cheese).
We were the taverna’s only customers – a sign of the bleak times for Greek
tourism – feasting outside as fierce winds whipped across the Corinth Gulf.

Soon, across those waters on the north-eastern rump of the Peloponnese, I
stopped at another site of the Panhellenic Games, Nemea – where a recreation
of its ancient bi-annual festival will be held later this year (see panel
below). The Doric columns of its excavated temples were visible but out of
reach: I was greeted by stray dogs and a locked gate.

And so it was to the best-known site of the Panhellenic Games, Olympia: a
place so influential on the modern games that De Coubertin had his heart
buried near its ruins. Along with my guide Nike – a serendipitous name, I
thought – I stood where the “cheese-grater” torch will be lit on Thursday.
The ceremony is a strange, melodramatic affair, one that could never happen
in Britain without tongues being firmly lodged in cheeks.

The Olympic torch ceremony takes place in Olympia on May 10

It’s a serious business here, though. A circle of “priestesses” – actresses
from the Greek national theatre dressed in long, virginal robes – invoke the
gods and kindle the torch near an altar where live animals used to be
sacrificed to the goddess Hera. The location is purely for aesthetic
reasons: the Doric columns of the temple to Hera are more intact than those
of Zeus, the site’s principal place of worship. The torch relay it
precipitates is without ancient precedent, having started for the 1936
Olympics in Nazi Berlin.

For all that, there is an indefinable something about the site. Closing time
was approaching and tourists drifted towards the exit. A moment of quiet
descended, a breeze rustling the olive tree beside Hera’s altar and the
brilliant, unfurling buds of Olympia’s Judas trees. Kitsch and derivative
the tradition may be, but there was an intangible aura in that ancient

At the Olympia stadium the next day, it was less tranquil. Tourists lounged on
the grass banks, watching schoolchildren re-enact the races of the Classical
era on the dirt track. One group held weights to recreate the Greeks’
standing jump, before diverting off the ancient script with a three-legged
race. A large teenager shouted “Run, fat boy, run” at a large Spanish father
racing his daughter down the track, to the sniggers of his classmates and
even his teacher (all English, I’m afraid).

It could have been worse. A few years ago, six young Americans tried to mimic
the old games by streaking naked down the track – and were promptly
arrested. “It has happened quite a few times,” Nike told me. “People come
here and they just get carried away by being at Olympia.”

So at last, I had the chance to do my own run (fully clothed) where the
ancients once strode. I crouched on the stone starting line, and
contemplated the length of the track. Known as a stade, it is 192m long,
supposedly 600 times the length of Hercules’s foot (which made the demigod
an impressive size 15). A thought occurred to me. “Would Pheidippides ever
have raced here?” I wondered.

“I doubt it,” Nike told me. “He was a professional soldier so wouldn’t have
had time to train for the Games.” Reminded by my query, she began to tell me
about a tour she had given to finishers of a race called the Spartathlon.
This gruelling running event covers more than 150 miles, and is based on
Herodotus’s version of Pheidippides’s journey, probably the most
historically accurate.

“They had run all the way from Athens to Sparta,” she recalled. “They were all
totally exhausted.” Quite an achievement: a race that made chasing a myth
along Highway 83 seem like a sensible idea.

Greece update

Despite the economically difficult times – a key issue in tomorrow’s
parliamentary elections – most visits to Greece are likely to be trouble
free, according to the Foreign Office. Visitors are advised to check if
strikes may affect their journey, and to avoid large gatherings. Watch out
for opening hours, too: austerity measures mean that some major sites –
including Olympia – have been closing earlier than usual, although that may
not be a concern in high season. Check in advance if possible, especially on

More information:

our full guide to Athens

Greece fact box

Jolyon Attwooll travelled with Sunvil Holidays and Peter Sommer Travels.

Sunvil Holidays (020 8568 4499;
arranges tailor-made travel throughout Greece. City breaks (3 nights) to
Athens from £477 pp (two sharing, dep. 22nd May), incl. flights (LGW),
private taxi transfers and 3-star hotel (BB) close to new Acropolis

Full-day private guide from £238 pp; half-day city tour (coach and guide) for
£53 pp. Fly-drive touring options, with expert itinerary help, from £806 pp
(two sharing) for a 7-night trip, incl. flights (LHR/Athens), car hire and
3-star hotels (BB). The mainland/Peloponnese offer classical sites
(Delphi, Olympia, Mycenae, Nemea, Tyrins, Nafplion, etc.), unspoilt beaches,
good walking, excellent regional wines/good food.

Peter Sommer Travels (01600 888 220;
offers expert-led archaeological and cultural tours in Greece, Turkey and
Italy, including bespoke traditional gulet-based tours of both the Southern
and Northern Dodecanese islands. A high-quality eight-day gulet cruise costs
from £2,185 pp (based on a group of ten) including seven nights’ full-board
en suite accommodation, transfers, all entrance fees and expert guiding.
Flights extra.

Delphi (Pythian Games)

The most spectacular location of all the sites. Although these games, which
were dedicated to the god Apollo, were important, the significance of the
Delphic Oracle meant the site is not as defined by the festival as the other
sites. The on-site museum – which includes the Charioteer of Delphi, a
beautifully preserved bronze statue from the fifth century BC – is a
must-see. 9am to daily; €9 (£8.16).

The spectacular setting of Delphi

Olympia (Olympic Games)

Games here were held every four years in honour of Zeus. Apart from the
evocative ruins (try to get there early), do not miss the Archaeological
Museum, which has some of the world’s finest displays of classical
sculpture, including Praxiteles’s Hermes, and the magnificent pediments from
the temple of Zeus. Two other museums, dedicated to the Olympic Games in
antiquity and the excavations, are currently closed due to a theft earlier
this year. 8am to 3pm, Tuesday to Sunday; 10am to 5pm, Monday; €9 (£8.16)
for archaeological site and museum.

Nemea (Nemean Games)

These bi-annual games were also held in honour of Zeus. Includes the temple
area and a separate stadium. A recreation of the ancient Games will take
place on June 23 and events are open to the public, as long as you are
prepared to run barefoot and in long, white tunics. See for
more details. The last date for registration is May 15. There is also an
on-site museum. 8.30am to 3pm, Tuesday to Sunday; €4 (£3.60) (museum, site
and stadium).

Isthmia (Isthmian Games)

These were held on the isthmus of Corinth to honour Poseidon. Excavations are
limited compared to other sites. There is a small on-site museum. 8.30am to
3pm, Tuesday to Sunday; €2 (£1.80).