Athens, Greece (CNN) — Greece will hold new elections on June 17, state media reported Wednesday, after Greeks pulled hundreds of millions of euros out the banking system amid fears that the country will not be able to stay in the European Union’s single currency.
Setting the date for a new vote comes 10 days after a national election where voters punished the major parties for harsh budget cuts, leaving no party able to form a government.
A caretaker administration led by a senior judge will run the country until the new vote.
The interim prime minister, Panagiotis Pikrammenos, will go to the office of President Karolos Papoulias to receive his official instructions Wednesday, Greek state television reported.
As Greek politicians met Wednesday to set the new election date, German Chancellor Angela Merkel said she regretted the suffering of the Greek people in the face of harsh government budget cuts.
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“It’s very bitter, obviously,” she said of the austerity measures that have left some Greeks struggling to pay for food or utilities.
But, she said, “Sacrifices had to be made. … I think these are necessary measures that had to be taken.”
Merkel, a champion of forcing governments to balance their budgets in order to promote stable economic growth in Europe, did offer an olive branch to Greece.
“Europe needs to show solidarity and help, particularly with growth, unemployment and development,” she said.
Merkel was speaking after Greeks withdrew hundreds of millions of euros from banks, prompting the president of Greece’s central bank to warn that a panic was possible, but not taking place.
Greeks pulled about 800 million euros out of the banking system Tuesday, President Papoulias said, citing Central Bank Governor George Provopoulos.
“There is, of course, no panic, but there is fear that could develop into panic. He also said that the strength of banks is very weak at the moment,” Papoulias said, citing the bank governor.
The Greek debt crisis threatens the stability of the European Union’s single currency.
Europe is worried that Greece could fail to make debt payments as early as next month. And that could force the country out of the euro, the currency used by 17 European Union countries.
Merkel said she was working to keep Greece in the eurozone.
“I start with the assumption that Greece wants to stay in the eurozone, but part and parcel of that is that Greece fulfills its commitments,” she said.
She refused to be drawn into talk about what would happen if Greece did not meet its debt obligations.
The European Central Bank and International Monetary Fund have been pumping money into Greece to keep the country in the euro, but they have demanded that the Greek government slash spending to get the funds.
Radical leftist leader Alexis Tsipras, whose Syriza party reaped the benefits of voter frustration with the austerity measures, urged Greeks on Tuesday to continue resisting “the parties of the bailout.”
“They asked us to leave the country without any hope,” he said, arguing that the May 6 election had left the terms of the bailout “null and void.”
New Democracy leader Antonis Samaras, meanwhile, said his party would “keep fighting for a developing Greece within Europe” and “against those who say they want to get Greece out of Europe.”
His party narrowly came in first in the May 6 elections, but opinion polls since then have suggested that Syriza would finish in first place in a new election.
Analysts have warned that Greece must not remain without a government for long.
“If no government is in place before June when the next installment (of loan money) from the European Union and International Monetary Fund is due, we estimate that Greece will run out of money sometime between the end of June and beginning of July, at which point a return to the drachma would seem inevitable,” Bank of America/Merrill Lynch wrote in a report released Friday.
Matthew Chance reported from Berlin, and Antonia Mortensen reported from Athens, Greece. Journalist Elinda Labropoulou contributed to this report.