File Photo: Greece's Prime Minister Antonis Samaras. (Reuters)
Greece began the countdown to early elections today with President Karolos Papoulias set to dissolve parliament for a ballot that has already rattled markets and could revive fears of the country's future in the eurozone.
Prime Minister Antonis Samaras was meeting with Papoulias to propose that the elections -- the second in less than two years -- would take place on January 25.
The snap ballot was called Monday after lawmakers failed in a third attempt to elect a successor to 85-year-old Papoulias, whose five-year term ends in March.
The last election plunged Greece into weeks of political uncertainty and there are fears of a repeat next month given the close race between Samaras' New Democracy conservatives and Syriza, the anti-austerity radical leftists.
"In an unprecedented twist, the new parliament could elect a president and be dissolved again for new elections (immediately afterwards) if a government cannot be formed," wrote liberal Kathimerini daily today.
"The elections nobody wanted, held in a climate of uncertainty," said centre-left Ta Nea daily.
Avgi, the Syriza party daily, said a leftist government would give "hope to the peoples of Europe and nightmares to the elites oppressing them."
Greek stocks closed down almost four percent on Monday -- having lost a massive 11 percent earlier -- amid fears that front-running Syriza could roll back austerity measures if it wins the election.
The bourse opened with a fresh 0.51-per cent drop today.
Bailout suspended Syriza had dismissed warnings that its electoral programme could shake the markets but, within hours of the election call on Monday, the International Monetary Fund said it was suspending further bailout payments to Greece until a new government was formed.
"Discussions with the Greek authorities on the completion of the sixth review of the programme... will resume once a new government is in place, in consultation with the European Commission and the European Central Bank," said IMF spokesman Gerry Rice.
Syriza, which declined to vote in the presidential ballot in order to force snap legislative polls, wants to raise salaries and pensions, halt layoffs and freeze the privatisation of state assets -- key elements of reforms demanded by Greece's EU-IMF creditors.
"This is the beginning of the end of a regime that plunged Greece into poverty, unemployment, misery and despair," Syriza leader Alexis Tsipras told supporters on Monday, promising a "real negotiation" with the country's EU creditors.
The European Union has called on Greeks to stick by the often painful reforms adopted as part of a massive international bailout for the eurozone member state.
"A strong commitment to Europe and broad support among the Greek voters and political leaders for the necessary growth-friendly reform process will be essential for Greece to thrive again within the euro area," EU economic affairs commissioner Pierre Moscovici said.
German Finance Minister Wolfgang Schaeuble has warned the cash-strapped country not to abandon the agreed economic reforms, saying: "they have no alternative".