Oct 3, 2011
LONDON — European stocks slumped and the euro hit an eight-month dollar low on Monday after Greece said it would not meet a target for reducing its massive deficit, heaping fresh pressure on the eurozone crisis.
Equity markets were down around 2.0 percent as bank stocks tumbled in midday deals on the first trading day of the fourth quarter after Greece said the budget deficit should drop to 8.5 percent of GDP in 2011, short of its target.
Greece’s economy will meanwhile contract 2.5 percent next year, according to the 2012 draft budget the government submitted to parliament on Monday.
In foreign exchange deals, the euro struck $1.3314 — the lowest point since January — before a meeting due on Monday of eurozone finance ministers to decide whether Greece should receive an eight-billion-euro loan installment.