Greece hits political stalemate; President invites parties to final meeting

Greece's president met little enthusiasm from political leaders summoned to a final round of talks today to avert a new election, reinforcing fears the country was firmly on the path to bankruptcy and an exit from the euro zone.

After Sunday's effort at cajoling party leaders into a coalition proved fruitless, President Karolos Papoulias summoned four party leaders for a fresh round of talks on Monday evening.

But the talks appeared doomed long before they began, as the young leader of the radical leftist SYRIZA party said he would not attend and another leftist leader refused to take part in any coalition unless SYRIZA was on board.

Papoulias must call a new election if he fails to engineer a compromise. Such a poll is expected to be held in mid-June.

With Greece set to run out of money as early as next month and no government in place to negotiate the next aid tranche, investors have begun betting that a long-speculated Greek default and euro exit will happen sooner rather than later.

European paymaster Germany appealed to Greeks to build a viable government, but acknowledged that the country was in a difficult situation.

The prospect of national bankruptcy and a return to the drachma appeared to be slowly sinking in among Greeks, who must now choose between the pain of spending cuts demanded in return for aid and an even more painful existence outside the euro.