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ATHENS (AFP) -- Greece will have to hold fresh elections after talks on forming a new government broke up Tuesday without agreement, socialist Pasok party leader Evangelos Venizelos said.
"We are going again towards elections, in a few days, under very bad conditions," Venizelos said, while a statement from the president's office noted simply that efforts to form a government had failed.
The talks turned on implementation of a very tough EU-IMF debt bailout accord after May 6 inconclusive elections saw Greeks largely vote against the austerity measures which Athens agreed to in return for the aid.
Panos Kammenos, leader of the Greek Independents party, lashed out at those he claimed would betray the people and who "prefer the creditors to national unity."
President Carolos Papoulias called a meeting meanwhile for 1000 GMT Wednesday with all party leaders to put in place an interim government to run the country until fresh elections, expected on June 10 or 17.
Five of the parties which won seats in inconclusive polls on May 6 went into the talks to discuss a presidential plan for a technocrat administration to resolve differences over the EU-IMF debt bailout.
President Papoulias called the meeting after talks Monday with the conservative New Democracy, Pasok and radical Democratic Left parties failed to reach an accord on a coalition government.
He suggested that in the absence of any other solution, a government of "distinguished and non-political figures" should be considered to defuse an impasse over the tough austerity measures agreed to in the EU-IMF bailout.
Forming such a government would have avoided new polls and helped keep Greece in the eurozone, but time was very short -- parliament convenes Thursday and new polls had to be called if there was no government in place by then.
Also attending Tuesday's talks were leaders of the Greek Independents party and the radical left Syriza, which came second on May 6 on its pledge to scrap the austerity policy, if not the whole EU-IMF deal.
The polls produced no clear winner and showed a majority of Greeks opposed to the austerity measures, which many feel make the problems worse, reflecting increasing calls across Europe that the focus needs to be on growth.
Figures on Tuesday showed the Greek economy slumped a massive 6.2 percent in the first quarter compared with a year earlier, leaving the country mired deep in recession for a fifth year.
President Papoulias told Monday's meeting that time was running out for Greece, adding: "I am terrified at the idea of the problems facing the country" in the coming days.
Two tests were at least passed Tuesday -- the government managed to raise 1.3 billion euros in short-term funds even if it had to offer higher rates to do so, and it repaid 436 million euros in maturing debt.
That repayment covered private creditors who had refused to take part in an unprecedented debt write-down agreed under the EU-IMF bailout and a government source said the moved was aimed at settling the dispute.
Success Tuesday would have marked a return to the technocrat solution of November when former central banker Lucas Papademos, supported by New Democracy and Pasok, pushed through the 240 billion euro ($310 billion) EU-IMF bailout accord.
In recent months, senior EU officials have more openly raised the prospect of Greece leaving the euro, but on Monday the head of eurozone finance ministers group hit back strongly, insisting that Athens was staying put.
"I don't envisage, not even for one second, Greece leaving," Jean-Claude Juncker said after the 17 eurozone partners unanimously affirmed their "unshakable desire" to keep Greece in the club.
"This is nonsense, this is propaganda," he said, adding that the Eurogroup "will do everything possible" to prevent a Greek exit and that "absolutely no one argued in that direction."
There can be little doubt about the seriousness of the situation both for Greece, if it has to leave the eurozone, and for its partners, who might lose billions in its disorderly withdrawal from the bloc.
France would face a bill of 50 billion euros if Greece were forced to quit, its outgoing Finance Minister Francois Baroin warned Tuesday.
"If Greece leaves the euro, if its economic model collapses and there's no more banking system, that would cost us 50 billion euros net, plus the assets that the banks and insurers have on their books," he said.
Charles Dallara, who as head of the Institute of International Finance helped negotiate the private creditor write-down, warned that the cost of failure would be too high to bear.
"I believe that the cost to Greece, the cost to Europe and the cost to the entire global economy may still be enough to cause Greek politicians and European politicians to pause before they pull the trigger on a Greek exit."
"We are going again towards elections, in a few days, under very bad conditions," Venizelos said, while a statement from the president's office noted simply that efforts to form a government had failed.
The talks turned on implementation of a very tough EU-IMF debt bailout accord after May 6 inconclusive elections saw Greeks largely vote against the austerity measures which Athens agreed to in return for the aid.
Panos Kammenos, leader of the Greek Independents party, lashed out at those he claimed would betray the people and who "prefer the creditors to national unity."
President Carolos Papoulias called a meeting meanwhile for 1000 GMT Wednesday with all party leaders to put in place an interim government to run the country until fresh elections, expected on June 10 or 17.
Five of the parties which won seats in inconclusive polls on May 6 went into the talks to discuss a presidential plan for a technocrat administration to resolve differences over the EU-IMF debt bailout.
President Papoulias called the meeting after talks Monday with the conservative New Democracy, Pasok and radical Democratic Left parties failed to reach an accord on a coalition government.
He suggested that in the absence of any other solution, a government of "distinguished and non-political figures" should be considered to defuse an impasse over the tough austerity measures agreed to in the EU-IMF bailout.
Forming such a government would have avoided new polls and helped keep Greece in the eurozone, but time was very short -- parliament convenes Thursday and new polls had to be called if there was no government in place by then.
Also attending Tuesday's talks were leaders of the Greek Independents party and the radical left Syriza, which came second on May 6 on its pledge to scrap the austerity policy, if not the whole EU-IMF deal.
The polls produced no clear winner and showed a majority of Greeks opposed to the austerity measures, which many feel make the problems worse, reflecting increasing calls across Europe that the focus needs to be on growth.
Figures on Tuesday showed the Greek economy slumped a massive 6.2 percent in the first quarter compared with a year earlier, leaving the country mired deep in recession for a fifth year.
President Papoulias told Monday's meeting that time was running out for Greece, adding: "I am terrified at the idea of the problems facing the country" in the coming days.
Two tests were at least passed Tuesday -- the government managed to raise 1.3 billion euros in short-term funds even if it had to offer higher rates to do so, and it repaid 436 million euros in maturing debt.
That repayment covered private creditors who had refused to take part in an unprecedented debt write-down agreed under the EU-IMF bailout and a government source said the moved was aimed at settling the dispute.
Success Tuesday would have marked a return to the technocrat solution of November when former central banker Lucas Papademos, supported by New Democracy and Pasok, pushed through the 240 billion euro ($310 billion) EU-IMF bailout accord.
In recent months, senior EU officials have more openly raised the prospect of Greece leaving the euro, but on Monday the head of eurozone finance ministers group hit back strongly, insisting that Athens was staying put.
"I don't envisage, not even for one second, Greece leaving," Jean-Claude Juncker said after the 17 eurozone partners unanimously affirmed their "unshakable desire" to keep Greece in the club.
"This is nonsense, this is propaganda," he said, adding that the Eurogroup "will do everything possible" to prevent a Greek exit and that "absolutely no one argued in that direction."
There can be little doubt about the seriousness of the situation both for Greece, if it has to leave the eurozone, and for its partners, who might lose billions in its disorderly withdrawal from the bloc.
France would face a bill of 50 billion euros if Greece were forced to quit, its outgoing Finance Minister Francois Baroin warned Tuesday.
"If Greece leaves the euro, if its economic model collapses and there's no more banking system, that would cost us 50 billion euros net, plus the assets that the banks and insurers have on their books," he said.
Charles Dallara, who as head of the Institute of International Finance helped negotiate the private creditor write-down, warned that the cost of failure would be too high to bear.
"I believe that the cost to Greece, the cost to Europe and the cost to the entire global economy may still be enough to cause Greek politicians and European politicians to pause before they pull the trigger on a Greek exit."
