European stocks have fallen for a third straight day as investors grow increasingly worried about lack of progress in negotiations between Greece and its creditors. As David Pollard reports, the impact isn't confined to Greece.
It's grim outlook, even if markets are pricing it in more and more. (SOUNDBITE) (German) CAPITAL MARKETS ANALYST AT BAADER BANK, ROBERT HALVER, SAYING: "Should the Greeks not present a new list of reforms, a national bankruptcy can no longer be avoided, I believe, because the loss of confidence in creditor countries would be far too big." Baader Bank's Robert Halver is among a growing number of analysts who see bankruptcy as likely. Though that's not entirely Greece's fault, says Alexis Tsipras. The Greek prime minister - meeting the leader of the centrist To Potami party - says he still wants a solution. (SOUNDBITE) (Greek) GREEK PRIME MINISTER ALEXIS TSIPRAS, SAYING: "It is crucial we strike a viable deal. Its not crucial just for the government, it's crucial for the country. It is crucial to end this vicious cycle and not be forced to go to a deal which, in six months' time, will bring us back to the same point.'' But with both Greece and its paymasters apparently retrenching their positions after the collapse of talks on Sunday, words and deed appear not to match. European shares fell through that credibility gap and into the red for a third straight day. The FTSE Eurofirst 300 touched its lowest level since February. A key gauge of sentiment added to the pessimism - Germany's ZEW slipped more than expected in June on Greek nerves. While yields on peripheral bonds leapt in what's described as on one of the most serious episodes of contagion since the height of the debt crisis. London Capital Group's head analyst, Brenda Kelly. (SOUNDBITE) (English) BRENDA KELLY IS AT LONDON CAPITAL GROUP, SAYING: ''If you look at the likes of Italy, particularly the BTPs, contagion is starting to rear its head here. Whether or not it'll be a sustained attack remains to be seen, but I think we're entering uncharted territory here and if it does turn out that Greece is going to default, I think markets are going be looking for the next domino to fall.'' That a prospect that has some in the markets asking whether this will be the week of truth for Greece and its creditors.