May 16, 2012
Unable to create a government after nine days of negotiations, Greeks are slated to head back to the polls in June for a second attempt. In Germany, editorialists almost universally share the view that the new election will be a de facto referendum on whether the country should remain in the euro zone.
Markets are falling on the prospect of a Greek exit from the euro zone after the country called a repeat election on June 17 which leftists opposed to the terms of the bailout are expected to win.
European shares and the euro continued to fall on Wednesday on fears of a Greek exit from the common currency in reaction to Tuesday's announcement that Greece will hold a repeat election after parties failed to form a coalition government in nine days of talks after the May 6 vote.
Greek political leaders will try to agree a caretaker government in Athens later on Wednesday to see them through to the expected vote on June 17 -- a poll that is expected to be won by the left-wing SYRIZA party, which has pledged to stop the painful austerity measures attached to the international bailout for Greece.
In a sign of mounting uncertainty, Greeks have been withdrawing euros because they are afraid of a possible rapid devaluation if the country leaves the single currency, reports said, citing minutes of President Karolos Papoulias's meetings with political leaders.
Policymakers from European Union states and at the European Central Bank have warned that they will not provide Greece with additional financial aid if the government scraps the bailout.
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