June 18 - As the conservative new Democracy party attempts to form a coalition government in Greece after a second election in as many months, problems in other euro area countries like Spain and Italy aren't getting any better. Joanne Nicholson reports.
He's likely to be the next Greek Prime Minister and it's the election result the rest of Europe wanted. But is Antonis Samaras the man to keep Greece in the euro? Many say it's still just a matter of time before it leaves. Tobias Blattner is a European economist at Daiwa Capital Markets. SOUNDBITE (English) TOBIAS BLATTNER, EUROPEAN ECONOMIST, DAIWA CAPITAL MARKETS, SAYING: "Now we know it's not going to happen within the next two or three months. And I think in a way that uncertainty is hanging over the markets. Also we don't just have the Greek problems. In the rest of the Euro area the problems remain so in a way I think all eyes will be on the European summit next week." Germany - euro zone's paymaster - says it may now be willing to grant Athens more time to meet its fiscal targets But the lack of a comprehensive plan for the euro zone remains a big problem. Richard McGuire, is a senior fixed income strategist at Rabobank SOUNDBITE (English) RICHARD McGUIRE, SENIOR FIXED INCOME STRATEGIST, RABOBANK, SAYING: "Ultimately we think some form of fiscal unity is the only solution to this crisis. Eurobonds are a distant prospect, quantitative easing is the most logical long term means of instigating such unity in a de facto sense." The euro zone is top of the agenda at the G20 in Mexico. So far European leaders are staying firm on keeping Greece in the euro Spain's Prime Minister Mariano Rajoy delivered some familiar sounding rhetoric. (SOUNDBITE) (Spanish) SPANISH PRIME MINISTER MARIANO RAJOY "I am completely convinced that the result reinforces the euro and that soon Greece will feel the effects of this decision and I hope that very soon the Greeks will go through a period of economic growth which is, after all, what we all want." Many think Athens will have no choice but to breach the terms of its bailout as harsh austerity measures continue to cripple the Greek people. But that could be the least of Europe's worries. Given the scale of the problems facing the euro zone, Europe's leaders need a policy solution on a different scale to avoid a full euro break-up. Joanne Nicholson, Reuters