May 17, 2012
Greece now has a new caretaker government, following the political parties' failure to form a coalition government. Greece's president says that close to $900 million worth of euros was withdrawn from Greek bank accounts on Monday. Meanwhile Spain has seen its borrowing costs rise on the international markets as investors fear the crisis could spread across southern Europe.
Greece's new caretaker cabinet took office Thursday. Senior judge Panagiotis Pikrammenos, shown here in the center, will head an emergency government of professors, technocrats and politicians through a turbulent month until repeat elections on June 17.
In Greece and across Europe, there's a growing feeling that the coming weeks could decide Greece's future in the eurozone.
With Greek depositors withdrawing hundreds of millions worth of euros from local banks, the European Central Bank has stopped offering loans to some Greek banks it does not consider solvent. But both politicians and analysts are cautioning against fears of a run on Greek banks.
"I would expect that the population will be quietly doing what it has been doing in previous days," said Theodore Krintas, a market analyst with Attica Wealth. "In other words, some of the Greek citizens are afraid and are taking slowly a portion of the money [out of the banks], but I'm not expecting a bank run."
Many Greeks say another election will simply prolong the agony. Dionyssis Dimitrakopoulos, a senior lecturer at Birkbeck College University of London, says there is a danger of the same poll producing the same result.
"Everybody, as we say in Greece, will have to add some water to their wine," said Dimitrakopoulos. "In other words to seek consensus, you cannot build consensus without moving away from your original position."
Spain saw its borrowing costs rise sharply as fears grow over contagion across southern Europe.
Shares in the Spanish bank Bankia, which is being bailed out by the government, plummeted Thursday after a newspaper report said customers had withdrawn more than 1 billion euros in just a week.