A supreme court judge has been appointed to head a caretaker government in Greece until new elections are held on June 17, as citizens continue to withdraw millions of euros from banks amid fears the country could soon be ejected from the eurozone.
Council of State head Panagiotis Pikramemos was appointed as premier by President Karolos Papoulias after nine fruitless days of talks aimed at forming a compromise government.
Pikramemos recently ruled that the bailout conditions set by the European Union and the International Monetary Fund do not violate Greece's constitution.
Many Greeks have been hoarding cash, with about 900 million euros ($A1.1 billion) withdrawn on Monday alone, a bank official told DPA.
Elections on May 6 failed to produce a conclusive result, with the outgoing ruling parties receiving a severe battering in the polls after pushing through spending cuts and tax hikes.
The caretaker government will not be able to make any internationally binding decisions. Emergencies will be handled in consultation with party leaders, Communist Party leader Aleka Papariga said.
Elections were called after a final proposal by Papoulias for a new government made up of technocrats was rejected by five political parties.
Party leaders have been squabbling for days over whether the country should continue down the path of harsh austerity measures, as prescribed by the EU and the IMF - or whether it should pull out of the bailout deal.
Both the conservative New Democracy and the socialist PASOK parties insist that Greece needs to conform with the terms of the bailout. But the Coalition of the Radical Left (SYRIZA), which came second in the May 6 vote, has been insisting that it be renegotiated or scrapped.
Recent polls suggest SYRIZA's strategy may be working with voters, with the party set to become the country's biggest in next month's vote.
While the majority of Greeks are against the harsh austerity terms demanded by international lenders, nearly 80 per cent want the new government to do everything necessary to keep the country in the euro, another recent poll showed.
Photo: Getty Images