Sydney - The euro dropped on Monday and stocks fell on fears that a 110 billion euro bailout of Greece will face stiff political challenges, while fresh steps by China to cool its economy added to near-term uncertainty. Major European stocks were expected to fall as much as 0.9 percent, with concerns about European sovereign debt, fears of more Chinese policy tightening and prospects of tougher banking regulations looming in front of investors. The emergency aid for Greece, the most ever for a country, alleviated some fears of a near-term sovereign debt default, but the package still has to obtain parliamentary approvals and left open the question of which fiscally vulnerable country in Europe might be next. Markets are deeply skeptical that Athens will be able to deliver on its latest promises for additional spending cuts and tax increases to reduce its budget gap to 3 percent of its economy by 2014, from more than 13 per cent.
