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LONDON — Global financial markets suffered their first bout of significant contagion from the Greek crisis this year on Monday after 11th hour talks between the near bankrupt country and its creditors collapsed.

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Athens now has just two weeks to find a way out of the impasse before it faces a 1.6 billion euro bill due to the International Monetary Fund, potentially leaving it out of cash, unable to borrow and cast out of the single currency.





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After weeks of minor ebbs and flows on the stop-start negotiations, bond markets across the euro zone signalled alarm that a deal may not be reached by mid-year, when Athens must repay 1.6 billion euros (US$1.8 billion) to the International Monetary Fund.

The premium investors demand to hold Spanish, Italian and Portuguese government bonds over low-risk German Bunds hit 2015 highs, with the 10-year yield gap between Spanish and German debt touching its widest since August.