A cabinet of professors and diplomats has been sworn in in Greece to steer the debt-ridden eurozone state into repeat elections on 17 June.

Panagiotis Pikrammenos, the senior judge who has taken over as prime minister, said the cabinet’s sole task was to lead the country into the polls.

The 300 MPs elected on 6 May are taking their seats for a single day.

Voters punished the two mainstream parties which agreed the cuts required under international bailouts.

A 130bn euro (£104bn; $165bn) bailout was agreed earlier this year, following a 2010 package of 110bn euros.

Fears that Greece may leave the eurozone are causing uncertainty about the monetary union’s future, despite attempts by politicians and bankers to play down the potential impact.

European shares edged lower at the start of trading on Thursday, having closed down during the last three sessions.

Greeks have been withdrawing their savings from banks, with nearly a third of deposits taken out in the first quarter of this year, Reuters news agency reports.

At least 700m euros have left Greek banks since 7 May, President Karolos Papoulias told party leaders this week after being briefed by central bank governor George Provopoulos.

A leading German economist has suggested a Greek exit from the euro would be better for both Greece and the eurozone.

Hans-Werner Sinn, head of the Munich-based Ifo institute, said that in order to stay in the euro, Athens would have to cut prices and wages by 30-40% to make its goods competitive, but could not do so because it would bring Greece to the “brink of civil war”.

“The Greeks must give up the euro as quickly as possible and reinstate the drachma,” he told the Rheinische Post.

Greece returns to the polls in one month’s time and opinion polls suggest Syriza, a leftist bloc opposed to the cuts, will win the biggest share of the seats in the next parliament.

The 16-strong new cabinet includes

-Giorgios Zannias, former head of the state’s council of economic advisers and a key debt negotiator, as finance minister
-Petros Molyviatis as foreign minister, a post he held before from 2004-06
-Frangos Frangoulis, former head of the army general staff, as defence minister
-Antonios Manitakis, a professor of constitutional law, as interior minister
-Eleftherios Ekonomou, a former police chief, as minister for public order

‘Exit terror’

Greece’s two biggest mainstream parties, the New Democracy (ND) conservatives and Pasok socialists, both suffered at the 6 May polls, but ND still emerged as the biggest party.

In tortuous negotiations last week, ND and Pasok failed to form a coalition government, and they have warned voters that anti-bailout policies will lead Greece out of the euro.

“Two courses lie ahead… either to change everything in Greece – with changes which can be carried out in a Europe that is also changing – or to experience the terror of an exit from the euro, the terror of isolation outside Europe and the collapse of all we have built so far,” said ND head Antonis Samaras.

Syriza, which came a strong second at the elections and was also unable to form a coalition, argues Greece should remain in the eurozone but should not be expected to make “barbaric” cuts.

Its leader, Alexis Tsipras, told BBC News on Wednesday: “Our choice is to stay in Europe without austerity policies.

“We are in favour of the euro without the austerity that is destroying it. We are convinced that if the austerity policies continue then the eurozone will be destroyed.”

An opinion poll released by VPRC suggests Syriza will increase its share of the vote from 16.8% to 20.3% while ND’s share will drop from 18.9% to 14.2%, and Pasok’s from 13.1% to 10.9%.

A recent poll by by Metron Analysis suggested a similar surge in support for Syriza and drop for Pasok, but suggested ND would retain its support at about 17.3%.

BBC News

Former Liberian President Charles Taylor has accused the prosecution of paying and threatening witnesses in his war crimes trial.

Taylor, who was convicted last month, also told judges in The Hague he was “no threat to society”.

It was the 64-year-old’s last chance to speak at the international court before he is sentenced later this month.

Taylor was found guilty of aiding and abetting rebels in Sierra Leone during its civil war.

In its landmark ruling last month, the Special Court for Sierra Leone found Taylor guilty on 11 counts, relating to atrocities that included rape and murder.

The prosecution wants an 80-year prison term, which the defence says is excessive.

‘Savage crimes’

Delivering his statement from a witness box on Wednesday, Taylor – who insists he is innocent of all charges – said money had played a “corrupting, influential, significant and dominant role” in his trial.

“Witnesses were paid, coerced and in many cases threatened with prosecution if they did not give statements,” he said.

Taylor also said judges were handicapped by not having the “full contextual picture” of events at the time.

He said he condemned atrocities across the world, and had the “deepest sympathy” for victims in Sierra Leone, but stopped short of expressing remorse or apologising for his part in the conflict.

Later, he asked the court to consider his age when making their decision.

“I’m a father of many children, grandchildren and great-grand.

“I say with respect: Reconciliation and healing, not retribution, should be the guiding principles in your honours’ task.”

At the end of his address, Mr Taylor also congratulated one of the judges, Julia Sebutinde of Uganda, the first African woman to sit at the International Court of Justice.

Prosecutors have said that Taylor’s ill health and age, or the fact that he has a family, should have no impact on the sentence.

In written filings, prosecutors said a sentence of 80 years would reflect the severity of the crimes and the central role that Taylor had in facilitating them.

“The purposely cruel and savage crimes committed included public executions and amputations of civilians, the display of decapitated heads at checkpoints… public rapes of women and girls, and people burned alive in their homes,” wrote prosecutor Brenda Hollis.

But defence lawyers said the recommended sentence was “manifestly disproportionate and excessive”, and that Taylor had only been found guilty of an indirect role – aiding the rebels, rather than leading them.

They said their client should not be made to shoulder the blame alone for what happened in Sierra Leone’s war.

The court should not support “attempts by the prosecution to provide the Sierra Leoneans with this external bogey man upon whom can be heaped the collective guilt of a nation for its predominantly self-inflicted wounds”, his lawyers wrote.

During the 1991-2002 Sierra Leone civil war, Taylor supported Revolutionary United Front rebels who killed tens of thousands of people.

The war crimes included murder, rape, the use of child soldiers and the amputation of limbs. In return, Taylor received “blood diamonds”.

The sentence is due to be handed down on 30 May.

Taylor is widely expected to appeal against any prison sentence and the hearing could continue for several more months.

Under a special arrangement with the international court, any prison term Taylor does receive will be served in Britain.

BBC News

Greece will hold fresh elections on 17 June and a judge has been appointed to head an interim government.

Council of State president Panagiotis Pikramenos will head the caretaker government until the election.

The election date was announced after party leaders met Greek President Karolos Papoulias on Wednesday.

Final talks to form a coalition failed on Tuesday, raising new concerns over Greece’s eurozone future. No party won a majority in the 6 May election.

There has been deadlock since the election over whether to continue with the austerity measures required by an international bailout agreement.

Recent opinion polls suggest that Syriza, a leftist bloc opposed to the tough bailout conditions, would win a new election, but would still not gain enough for a parliamentary majority. It came second on 6 May.

The uncertainty pushed the euro to a new four-month low against the dollar on Wednesday.

EU officials fear Greece will elect an anti-bailout government, which could trigger a Greek exit from the euro. That possibility is now discussed openly among Europe’s leaders, the BBC’s Mark Lowen in Athens says.

But a senior adviser to European Council President Herman Van Rompuy played down the possibility.

“We’re not planning for a Greek exit, nobody is planning for a Greek exit,” Richard Corbett told BBC Radio 4′s Today programme.

“That would not help Greece, it would not help the rest of the European Union and technically by the way, it’s an extraordinarily difficult thing to do. The idea of planning a Greek exit would risk being a self-fulfilling prophecy.”

Jittery markets

On Wednesday the eurozone crisis pushed Asian stocks lower and knocked oil prices.

Tokyo’s Nikkei index dropped 1%, while Hong Kong’s Hang Seng and South Korea’s Kospi lost about 3%.

The euro fell more than half a cent to $1.27.

Meanwhile the borrowing costs for Spain and Italy rose again, with Spanish bond yields hitting 6.5% and Italy’s 6.1%.

The uncertainty over the euro has also sparked concern over a run on the banks in Greece.

Greek newspapers report that around 700m euros (£558m; $897m) has been withdrawn from high street banks over the past few days, the BBC’s Richard Galpin in Athens says.

People are concerned that an exit from the eurozone and a reversion to the drachma would wipe out much of their savings, he says.

European leaders say they will cut off funding for Greece if it rejects the bailout agreed in March.

This would mean effective bankruptcy for Greece and its all but certain exit from the euro, analysts say.

German Finance Minister Wolfgang Schaeuble stressed again on Wednesday that there would be no new discussions on Greece’s bailout.

The head of the International Monetary Fund, Christine Lagarde, has raised the possibility of orchestrating an “orderly exit” for Greece from the eurozone.

“It is something that would be extremely expensive and would pose great risks, but it is part of options that we must technically consider,” she said on Tuesday.

After talks in Berlin with German Chancellor Angela Merkel following his inauguration as French president, Francois Hollande said he wanted Greece to remain in the euro.

‘Timely payment’

The Syriza bloc wants to renegotiate the bailout package but also wants to keep Greece in the euro.

Pasok and New Democracy, which signed up to the bailouts and had previously dominated Greek politics for decades, saw their combined share of the vote drop from about 77% to about 33% on 6 May.

On Tuesday, Greece said it would make a “timely payment” on 435m euros’ worth of debt due on 15 May.

BBC News

Greece is set to go to the polls again after days of coalition talks failed to produce agreement on a new government, says the leader of the Socialist Pasok party, Evangelos Venizelos.

A final round of talks on Tuesday morning broke up without a deal.

In elections on 6 May, a majority of Greek voters backed parties opposed to austerity plans demanded by the EU and IMF in return for two bailouts.

The Greek president will appoint a caretaker government on Wednesday.

President Karolos Papoulias will meet all political leaders at 13:00 local time (10:00 GMT) on Wednesday to put in place an interim government until the new vote, expected to take place on 10 or 17 June.

“Unfortunately, the country is heading again toward elections,” Mr Venizelos told reporters after the talks on Tuesday.

The leader of the right-wing Independent Greeks Party, Panos Kammenos, said: “The pro-bailout parties would prefer a government which will further torment the Greek nation, rather than finding a solution. They have offered a proposal that is too rigid for me to accept”.

European leaders say that they will cut off funding for Greece if it rejects the bailout agreed in March.

This would mean effective bankruptcy for Greece and its all but certain exit from the European single currency, analysts say.

Polls suggest the leftist Syriza bloc, which came second in the 6 May vote and rejects all further cutbacks, could become the largest party after a new election.

Syriza wants to renegotiate the bailout package but also wants to keep Greece in the euro.

The chairman of the eurozone group of finance minister, Jean-Claude Juncker of Luxembourg, said on Monday he wanted Greece to remain in the single currency but warned that Athens must keep to its commitments.

Pasok and New Democracy, which signed up to the bailouts and had previously dominated Greek politics for decades, saw their combined share of the vote drop from about 77% to about 33% on 6 May.

BBC News

Francois Hollande has been sworn in as president of France, becoming the first Socialist leader in 17 years to occupy the Elysee Palace.

He said he was aware of the challenges ahead, including the debt crisis, and vowed to “open a new path in Europe”.

He will later name his prime minister and fly to Berlin for talks with German Chancellor Angela Merkel.

Mr Hollande called for “a compromise” over the German-led focus on austerity as the way out of the eurozone crisis.

On Monday, the value of stock markets and the euro fell amid continuing political uncertainty in Greece.

The chairman of the eurozone finance ministers, Jean-Claude Juncker, insisted on Monday night that they would do “everything possible” to keep Greece in the euro.

‘Message of confidence’

Mr Hollande was sworn in for a five-year term at the Elysee Palace in central Paris.

Outgoing President Nicolas Sarkozy shook hands with his successor in the palace’s courtyard before leading him inside for a private meeting, at which France’s nuclear launch codes were handed over.

The new leader asked that the inauguration ceremony be kept as low-key as possible, and invited just three dozen or so personal guests to join the 350 officials attending. Neither Mr Hollande’s children nor those of his partner, Valerie Trierweiler, were there.

In his first presidential speech, Mr Hollande said he wished to deliver a “message of confidence”.

“My mandate is to bring France back to justice, open up a new path in Europe, contribute to world peace and preserve the planet.”

The new president said he was fully aware of challenges facing France, which he summarised as “huge debt, weak growth, reduced competitiveness, and a Europe that is struggling to emerge from a crisis”.

Mr Hollande also said he wanted other European leaders to sign a pact that “ties the necessary reduction of deficit to the indispensable stimulation of the economy”.

“I will tell them the necessity for our continent is to protect, in an unstable world, not only its values but its interests in the name of commercial exchange,” he added.

After the inauguration, Mr Hollande rode up the Champs Elysees in an open-topped car, waving to the crowd despite the rain, before laying a wreath at the Tomb of the Unknown Soldier under the Arc de Triomphe.

He then paid tribute to the 19th-Century educational reformer Jules Ferry and the Nobel Prize-winning chemist Marie Curie.

The BBC’s Christian Fraser in Paris says the 57-year-old has spent the past week preparing to take up the presidency, and now the work begins in earnest.

His first job is to name a new prime minister, who our correspondent says will most likely be Jean-Marc Ayrault, leader of the Socialist group in parliament, a German speaker and a close ally. Michel Sapin, a key economic adviser to Mr Hollande, is tipped to be finance minister.

‘Compromises’

On Tuesday afternoon, Mr Hollande will fly to Germany for dinner with Chancellor Merkel, who says she will welcome the new leader “with open arms”.

But her embrace will hide some embarrassment, says the BBC’s Europe editor Gavin Hewitt, after Mrs Merkel openly supported Mr Sarkozy in the election battle.

“We don’t think the same on everything,” Mr Hollande acknowledged on French television on Monday. “We’ll tell each other that so that together we can reach good compromises.”

Mr Hollande has demanded that a European fiscal pact that cracked down on overspending be renegotiated to include a greater emphasis on measures to stimulate growth, while Germany insists the treaty must be respected.

Whatever their differences, the crisis in the eurozone will put them under huge pressure to compromise, our correspondent says.

As the eurozone’s two biggest economies – and biggest contributors to its bailout funds – Germany and France are key decision-makers over the strategy supposed to pull Europe out of crisis.

According to official figures released on Tuesday morning, the French economy showed no growth in the first quarter of 2012. Growth in the final quarter of 2011 was also revised down to 0.1% from 0.2%.

However, Germany’s economy grew by a stronger than expected 0.5% in the first three months of the year.

Following his German trip, Mr Hollande will hold his first cabinet meeting on Thursday followed by a visit to Washington to meet US President Barack Obama on Friday.

BBC News