The Athens Stock Exchange plunged by 23 percent after opening on Monday as trading resumed after a five-week closure. As of 4:52 a.m. EDT, the index was down about 20 percent, having clawed back some gains.
The country’s main lenders, National Bank and Piraeus Bank, fell by 30 percent, the maximum allowed by daily volatility limits. Alpha Bank and Eurobank also fell by almost 30 percent. The country’s bourse was shut five weeks ago as part of a punishing set of capital controls that Athens imposed to tamp down on financial panic in the country.
Constantine Botopoulos, head of the Greek capital markets commission, said, on Greek radio: "Naturally, pressure is expected, markets will not fail to comment on such an extensive shutdown," according to the BBC. "But we must not get carried away. We must wait until the end of the week to see how the reopening will begin to be dealt with more coolly."
Greece reached a deal with its international creditors for a third bailout last month, but infighting in the ruling Syriza party has led to uncertainty over the country’s future. The European Commission predicted this year that Greece would slide back into a recession that would see its economy contract by 2 percent to 4 percent.
Last week, the International Monetary Fund, one of Greece’s main creditors, said that it could not afford to fund a third Greek bailout, citing the country’s financial mismanagement and astronomical debt. A previous IMF paper had admitted that Greece’s debt was “highly unsustainable.”
Greece is negotiating for its third bailout in five years, projected to be around $94 billion. Its financial record and spiraling debt mean that it lacks access to capital markets, leaving it reliant on emergency funding to maintain liquidity.
“The situation in Greek equity markets will have to get a lot worse before it gets better,” Luca Paolini, Pictet Asset Management’s chief strategist in London, told Bloomberg. “There are still critical risks to be resolved.”