Failure in the latest talks aimed at averting a Greek default hurt shares in Europe and Asia and weighed on the euro. As Sonia Legg reports there's a growing chorus of warnings that time is running out for Greece to reach a deal on its debts with its euro zone backers.
Greece's shares slumped 6% - after a similar fall on Friday - following the collapse of the latest cash-for-reform talks. The country's banking stocks were hit even harder at 12 percent And the damage wasn't confined to Greece. Shares in Europe and Asia also fell, as did the euro, while demand for low-risk government bonds rose. Peter Dixon is a Global Financial Economist at Commerzbank. (SOUNDBITE) (ENGLISH): Peter Dixon, Global Financial Economist, Commerzbank, SAYING: "There doesn't seem to be any sign that either side is prepared to compromise and I think this could lead to some kind of accidental exit of Greece from the euro zone which is something which could have much more serious ramifications down the line but I think the markets at the moment are playing it by ear." Greek Prime Minister Alexis Tsipras has ignored pleas from numerous European leaders to act fast. He's refusing to give way on key austerity measures and blames creditors for the collapse. Government spokesman Gabriel Sakellardis (SOUNDBITE)(Greek) GREEK GOVERNMENT SPOKESMAN, GABRIEL SAKELLARIDIS, SAYING: "We will not adopt measures which will cut pensions, raise the value added tax on basic goods or measures which exacerbate the vicious circle of austerity." It leaves Athens with just two weeks to find a way out of the deadlock before a 1.6 billion euro debt to IMF needs paying. But default doesn't necessarily mean Greece will exit the euro - European governments could intervene with the help of the ECB. (SOUNDBITE) (ENGLISH): Peter Dixon, Global Financial Economist, Commerzbank, SAYING: "But obviously that would be a very controversial outcome especially for many European politicians who are getting very fed up with this Greek brinkmanship." There are already signs of that - Germany's EU Commissioner says it's time to prepare for a "state of emergency." (SOUNDBITE) (German) EU COMMISSIONER, GUENTHER OETTINGER SAYING: "The offer is still valid to hold Greece in the euro zone. But for that to happen, Greece will have to move its position on pensions and its general budget consolidation. There is a gap which in my view cannot be filled by European taxpayers." So the message from both sides is clear - how to reach an agreement definitely isn't.