The future of the euro has been plunged into doubt as talks aimed at forming a coalition Government in Greece broke down.
Greeks will now go to the polls in a new election that will be seen as a referendum on the country’s bailout deal, and with it the possible end of the currency itself.
In elections on May 6th, Greeks rejected the parties who were backing the bailout plans negotiated with the IMF and the EU. After the failure of talks aimed at setting up a coalition government a new election will be held, probably around 10 or 17 of June.
The leader of the right-wing Independent Greeks Party, Panos Kammenos, said: “The pro-bailout parties would prefer a government which will further torment the Greek nation, rather than finding a solution. They have offered a proposal that is too rigid for me to accept”.
If the second elections results in the country rejecting the bailout plan, it would mean bankruptcy for Greece and certain exit from the single currency.
Early indications suggest the left leaning Syriza party, which came second in the 6 May vote could become the largest party after a new election.
Syriza wants to renegotiate the bailout package but also wants to keep Greece in the euro.
If Greece does leave the Eurozone there is already talk of the Drachma making a comeback and some sort of renegotiation that would allow the country access to credit.