2012-05-16 08:46:09

Eurozone fears for Greece

After nine days of talks on Tuesday political leaders in Greece admitted defeat in a bid to form a governing coalition. This political uncertainly has sent shock waves across Europe with key leaders fearing that the country could be forced out of the euro. One of those who has raised the possibility that Greece could leave the Eurozone is the head of the International Monetary Fund, Christine Lagarde

But in an interview with France 24 she also made it clear that such a move could pose serious risks to the region's financial stability.

The re-run election could provide parties who oppose current austerity measures with more seats - and hasten the country's exit from the eurozone.

Lagarde says the consequences would be unpredictable...

“You can think of clear financial turmoil and as a result, you know, you have consequences on growth, you have consequences on trade, you have consequences on the financial markets. So as I said it’s a multi faceted chain of consequences that are difficult to assess from a financial point of view. Certainly assume it would be, it would be quite messy.”

No date has been set for the elections but they will have to be held by mid-June.

June is the month in which Greece must make more spending cuts to ensure it meets the terms of its international bailout.

A caretaker government will be appointed until then. Listen RealAudioMP3

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