Greece will hold a new election in June after President Karolos Papoulias failed on Tuesday to persuade parties to form a government. The anti-austerity SYRIZA party could win next month, raising the prospect that Greece will abandon its reforms and quit the euro. Markets fell sharply on the news.
It was the final act in the tragedy surrounding the attempts to form a Greek government -- and it had a dramatic ending. Greece will hold a new election in June after politicians failed to form a government on Tuesday, nine days after a vote that produced a stalemate.
Athens now faces at least another month of political uncertainty that threatens to push Greece closer to bankruptcy and an exit form the euro.
After a third day of failed talks with political leaders, a spokesman for President Karolos Papoulias said the process of seeking a compromise had failed and a new vote must be held. Elections rules suggest it will be in mid-June, possibly June 17. A caretaker government is to be formed on Wednesday to lead the country until the new vote can be held.
"For God's sake, let's move towards something better and not something worse," Socialist party leader Evangelos Venizelos told reporters after the meeting. "Our motherland can find its way, we will fight for it to find its way."
Alexis Tsipras, the head of the Coalition of the Radical Left (SYRIZA), now has a key role because he looks set to win the new election. He is demanding that Greece abandon the reforms and austerity measures imposed on it by international lenders in return for aid. SYRIZA emerged as the second strongest political force in the March 6 election with 16.8 percent of the vote, and opinion polls suggest its support has since grown to 24 percent.