Greece to head to polls again after talks collapse
Elena Becatoros and Nicholas Paphitis - The Associated Press
People walk outside the Greek parliament on Tuesday, May 15, 2012. Greece is headed for another month of political paralysis ahead of new elections in mid-June, after party leaders on Tuesday failed to reach an agreement to build a coalition government. The protracted deadlock and the prospect of an anti-austerity party winning the new vote hammered Europe's markets on fears that the debt-crippled country could be forced out of the European single currency, triggering shock-waves throughout the 17-country eurozone.
Nine tortured days of fruitless talks to build a coalition government fueled increasing doubt that Greece can make enough reforms to prevent the world's largest currency union from fracturing.
"We expect the euro to remain under pressure as a result of this, and pressure on the borrowing costs, the bond yields, of countries like Spain and Italy to persist," said John Bowler, director of the Economist Intelligence Unit's Country Risk Service.
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