Euro turmoil continues as Greek talks fail

Attempts to form a government in Greece collapsed yesterday, jolting financial markets at the prospect that radical left parties opposed to the EU bailout terms could take power in a June election and tip the eurozone deeper into crisis.

The turmoil sent shockwaves around other troubled members of the 17-nation single currency. The euro slipped below $1.28, world stocks slid, and Spanish and Italian bond yields rose above the danger level of 6% as investors scurried for shelter in German bunds.

The tremors from Greece, compounding worries about Spain’s debt-laden banking system, ended any honeymoon for new French president François Hollande, thrusting the growing risks to the eurozone to the top of the agenda for his first ever meeting with German chancellor Angela Merkel in Berlin yesterday.