The election, expected on June 17, follows an inconclusive poll on May 6 when a majority of Greeks expressed their opposition to the austerity measures which Athens agreed to in return for a massive EU-IMF bailout late last year.
“We are going again towards elections ... under very bad conditions,” Pasok party leader Evangelos Venizelos said Tuesday after the last-ditch talks failed.
“The Greek people must now make the right decisions for the good of the country,” stressed Venizelos, who supported the EU-IMF deal in a technocrat government formed last November.
President Carolos Papoulias was due to meet party leaders on Wednesday to set up a caretaker administration to operate until the re-run polls, for which no date has yet been officially announced.
Figures Tuesday showing the Greek economy slumped a massive 6.2 per cent in the first quarter compared with a year earlier, fuelling the argument that the austerity policy is simply not working and the emphasis must turn to growth.