By Agencies

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The European Central Bank (ECB) has stopped offering liquidity to some Greek banks it does not consider solvent.

The move came as Greece called new elections for next month that look set to be won by parties opposing austerity measures, increasing international concern about the eurozone.

Fears that Athens is on the brink of exiting the eurozone and igniting a renewed financial crisis, have rattled global markets and alarmed world leaders, with Greece set to figure high on the agenda at a G8 summit later this week.

Meanwhile, cabinet ministers in Greece's interim government were sworn in on Thursday.

The caretaker cabinet will lead the country into repeat elections on June 17, after a deadlocked vote, led to more political turmoil and brought the country's euro membership into question.

Reports said that a veteran diplomat, Petros Molyviatis, would return to head the foreign ministry after a prior stint in 2004-2006, while the outgoing interior minister, Tassos Yianitsis, would take over as finance minister.

A retired general and former head of the army general staff, Frangoulis Frangos, is the reported choice for the post of defence minister.

On Wednesday, Panagiotis Pikrammenos, the 67-year-old head of the Hellenic Supreme Administrative Court, was sworn in as caretaker prime minister, with the sole task of holding new elections after the inconclusive general election on May 6.

Political uncertainty

Pikrammenos was appointed after Greek political parties failed to form a coalition government after the elections in which no clear clear victor emerged.

The political uncertainty in Greece has raised fears among the country's international creditors, the EU and the IMF, that structural reforms pledged in return for bailout loans, will be delayed or even scuppered.

Greece has been without a government since an inconclusive May 6 election left parliament split between supporters and opponents of a 130bn-euro bailout package reviled by many Greeks for imposing deep wage, pension and spending cuts.

Polls show the Radical Left Party, known as Syriza, which rejects the bailout and placed second in last week's vote, is now on course to win new elections, a result that would give it an automatic bonus of 50 seats in the 300-seat parliament.

"We resisted in every way," Alexis Tsipras, Syriza's leader, said.

"We made the decision to not betray your hopes and your expectations."

His party fought the election on an anti-austerity platform and blocked any deal with pro-bailout mainstream parties.

"Now it's time to complete it: We will consign in the dustbin of history all the spent forces of the past," Tsipras said.

The turmoil in Greece sent waves of concern across other troubled members of the 17-nation European single currency area on Tuesday.

'Disease of austerity'

The euro hit a four-month low on Wednesday and Germany paid the lowest rate in its history to borrow for 10 years, according to new data.

German Chancellor Angela Merkel said on Wednesday that she was ready to discuss stimulus programmes to get the Greek economy growing again and that she was committed to keeping Greece in the eurozone.

Alexis Tsipras, leader of the Syriza party, accused the EU and Merkel of "playing poker with European people's lives" in an interview with the BBC on Wednesday.

Tsipras told the BBC that if the "disease of austerity destroys Greece, it will spread to the rest of Europe".

Eurozone finance ministers have dismissed talk of Greece leaving the single currency area as "propaganda and nonsense".

However, with hostility to EU/IMF-imposed austerity rising in Greece, speculation about a possible state bankruptcy and euro exit is affecting financial markets.

Christine Lagarde, the head of the IMF, said it was important to be technically prepared for the possibility of Greece leaving the eurozone, saying that such a move would be "quite messy" with risks to growth, trade and financial markets.