Greece faces second election in less than two months

Debt-stricken Greece today faced the prospect of a second election in less than two months after failing to form a government, stoking the eurozone crisis even as France and Germany pledged support and perhaps help for growth.

The election, expected on June 17, follows an inconclusive poll on May 6 when a majority of Greeks voted for parties opposing the austerity measures which Athens agreed to in return for a massive EU-IMF bailout late last year.

However, there is no guarantee that the new vote will produce a viable government -- the main opponent of the EU-IMF deal is tipped to win -- which means even more uncertainty over Greece's future in the single currency club.

That was enough to send global financial markets into a tailspin as investors looked for a safe haven for their money, dumping stocks and the euro.

Markets were down again today, finding no comfort in a "we want Greece to stay in the euro" pledge by German Chancellor Angela Merkel made alongside new French President Francois Hollande.

Merkel said the two European powerhouses were also prepared "to study the possibility of additional growth measures in Greece" if Athens sought them.

But on Wednesday German Finance Minister Wolfgang Schaeuble insisted once again that it was not possible to re-negotiate the EU-IMF deal.

"This is an aid programme that was prepared down to the last detail, we cannot re-negotiate it," Schaeuble told Deutschlandfunk radio.

A further sign of nerves came with news that about 700 million euros ($894 million) had been withdrawn from Greek banks on Monday.

President Carolos Papoulias said the central bank governor had told him that the banks' "situation was very difficult ... and that the banking system was currently very weak."

The governor said "there was nothing to panic about but that there were a lot of fears that could turn into panic," Papoulias added in a statement late Tuesday.

The centre-left daily Ethnos wrote that Greece was heading for "elections in a minefield. The result will determine the country's future in the eurozone."

The euro tumbled today to $1.2693, its lowest level since January 16.

"There is a pervading sense of unease in financial markets, a disquieting feeling of having been in something like this position before and wondering if it might turn out the same," National Australia Bank said in a note.