Greek election set for June 17

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Greece will go to the polls for the second time in less than two months on June 17, the country's state-run news agency said on Wednesday, as fears grew of more instability over the country's eurozone future.

State-controlled Athens News Agency said Council of State president Panagiotis Pikrammenos, the head of Greece's top administrative court, will be caretaker prime minister and organise the ballot after a May 6 poll failed to produce a government ready to implement in full a tough EU-IMF bailout accord.

The country and financial markets had been anxiously awaiting the date of the new polls amid growing fears Greece could be forced out of the eurozone even if most people want to retain the euro for the benefits it brings.

The point of contention is the tough austerity measures included in the EU-IMF deal which saw voters desert the main Pasok and New Democracy parties who had supported it in a technocratic government.

Fixing an election date at least removes one uncertainty, but a host of problems remain, both for Greece and the wider eurozone. There is no guarantee that the new vote will produce a viable government - Syria, the main opponent of the EU-IMF deal, is tipped to win - which means more uncertainty over Greece's future in the single currency club.

News that about 700 million euros (USD 894 million) had been withdrawn from Greek banks on Monday stoked the tensions, with investors fearful that a Greek euro exit would be chaotic for everyone.

In a statement late on Tuesday, Papoulias said the central bank governor had told him that the banks' "situation was very difficult... there was nothing to panic about but that there were a lot of fears that could turn into panic." Christian Schulz of Berenberg Bank said the withdrawals suggested that Greeks were "getting increasingly worried about the country's future in the euro." On their own they "do not indicate panic quite yet.

However, this could change soon, so that the central bank would have to step in to save the banks.

Press reaction on Wednesday was subdued, reflecting the feeling that while most Greeks want to stay in the eurozone, they cannot live with more austerity.

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." Ta Nea, which supports the socialist Pasok party, said Greece was going into the polls "surrounded by uncertainty and fear over the economic collapse of the country."