Greece to go to polls as talks fail
Greece faces another election within weeks after nine days of talks to form a "unity" government finally collapsed.
The prospect became inevitable after Greek Socialist leader Evangelos Venizelos emerged from the latest failed meeting of political leaders to concede that no compromises on a workable administration were possible.
The outcome did nothing to steady jittery markets - not least because another election is almost certain to deliver an even more decisive protest vote against severe austerity measures which have severely hit jobs and incomes, and delivered little sign of economic recovery.
But the European Commission still insisted that any Greek administration - whatever its election mandate - would be expected to honour the national austerity policy agreed as part of multibillion-pound European Union (EU)-IMF bailout packages to keep Greece afloat.
The failure of the Greek political factions to settle their differences in the interests of stability came as newly-installed French president Francois Hollande was in Berlin arguing that the German-lead austerity strategy was too rigid and must be balanced with effective growth initiatives.
At the same time, EU finance ministers in Brussels agreed new rules on bank liquidity as a hedge against further economic shocks to the banking system - but could do little else but watch for a Greek breakthrough in Athens.
Prime Minister David Cameron's official spokesman said Britain wanted to see "decisive action" to end uncertainty in the eurozone but declined to discuss whether Greece should be offered a deal to allow it to stay in the single currency.
Official figures have suggested that - unlike Britain - the eurozone and the EU as a whole avoided recession in the first three months of this year. The 17-nation euro area saw GDP unchanged on the previous quarter while across the 27 members of the EU GDP grew by 0.1%, according to Eurostat estimates.
The stronger-than-expected performance in the first quarter of 2012 was largely due to growth of 0.5% in the German economy. Growth was also seen in Finland (1.3%) and Belgium (0.3%) while France recorded zero growth.
President Hollande has made that case with chancellor Merkel in Berlin and demanded a relaxation of the new EU fiscal pact which tightly controls spending in the eurozone. Coupled with the looming Greek election, Mr Hollande's growth drive is setting the scene for a dramatic showdown on EU economic strategy.