Investors besiege stock exchange as share prices plunge in Greece

 

Hundreds of angry investors, chanting "We want our money back", gathered outside the Athens Stock Exchange yesterday after shares took another plunge in a growing election campaign dilemma for the government.

The plummet of the once-booming exchange came as President Costis Stephanopoulos ordered parliament dissolved to prepare for a general election on April 9th.

The exchange's general index dropped 320.90 points to close at its lowest since August.

Just a year ago, Athens was one of the world's hottest markets. The socialist government tried to portray the skyrocketing shares as an extension of its economic programmes which have brought Greece to the threshold of the EU's single currency group.

The Prime Minister, Mr Costas Simitis, called early elections last month to take advantage of the healthy economic climate. However, the stock market dive has many Greeks questioning how the exchange could turn so sour while other markets in Europe and elsewhere remain strong.

Nearly one million Greeks, about 10 per cent of the population, are thought to own shares.

"I lost not only my money but the money of my clients, who will one day kill me," said Mr Lambros Yannoulis (57), an investment adviser with a major insurance company who joined about 350 protesters.

Others chanted "They are robbing us" as stockbrokers fled the building by its back door. Riot squads stood nearby, but the demonstration did not turn violent.

"They turned us into Albania," some people yelled, referring to failed pyramid schemes which in 1997 led to widespread chaos in Greece's northern neighbour.

The government spokesman, Mr Dimitris Reppas, accused the main opposition conservative New Democracy Party of being responsible for such allegations.

"I would call on their staff that talk about `pyramids' at the Greek exchange to prove their allegations," he said.

However, it was the government which was on the defensive and in a near-panic.

The Finance Minister, Mr Yannos Papantoniou, met leading Greek bankers, the head of the exchange and the head of the capital market committee.

"The conclusion is that bringing politics into the exchange has created negative consequences," Mr Papantoniou said.

He appealed for political parties to stop using the exchange as a pre-election issue and told investors to "close their ears to the sirens of politics".

He said there was no reason for the exchange to drop as the Greek economy was at its healthiest point in years.

Last week Greece applied for entry into the euro zone. EU leaders have signalled they will accept the country during their June summit.

Entry into the euro group has been the mainstay of Mr Simitis' policies for the past several years. Tight fiscal policies have brought inflation below 3 per cent and tackled debt which once crippled the EU's poorest country.

However, opposition parties blame the government for turning the exchange into a political issue by promoting the market when it was booming in early and mid-1999.

Those actions, opposition parties claim, led thousands of investors to huge losses when the exchange suddenly began deflating late last year.

Last week regulatory authorities began an investigation after government-backed allegations of share manipulations.