Collapse of coalition talks plunges eurozone into fresh turmoil as EU policymakers work on plans for post-Greek single currency Europe is facing a month of political and economic upheaval after the failure of nine days of coalition talks in Greece prompted fears on Tuesday that a fresh election in the crisis-torn country would herald the start of the breakup of the single currency. In what was being seen in the financial markets as an “in or out” referendum on membership of the 17-nation eurozone, party leaders in Athens called a second poll next month once it became clear that they were unable to piece together a national unity government to manage Greece’s biggest crisis in modern times. Karolos Papoulias, the Greek president, finally admitted defeat in his attempts to form a government and the date of the new election – either 10 June or 17 June – will be announced on Wednesday. The collapse of talks sent tremors through financial markets and prompted warnings from Germany’s finance minister, Wolfgang Schäuble, that Greece would have to stick to its hardline austerity programme in order to continue to receive the bailout cash needed to pay government salaries and support troubled banks. Europe’s policymakers are now actively working on plans to minimise the fallout from a possible Greek departure from the single currency after an election in which the anti-austerity Syriza party is expected to increase its support.

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