Greece will be forced to call new elections after political parties failed to form a coalition.
Party leaders made a final attempt to reach an agreement this morning, the Wall Street Journal reported. The talks ended without a deal, however, said Greek President Karolos Papoulias.
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That means that Greece will have to hold another vote, which according to the BBC is expected to take place on June 10 or 17.
An interim government will take charge until then. President Papoulias is due to meet party leaders tomorrow to decide who the caretakers will be.
"For God's sake, let's move towards something better and not something worse," Reuters quoted the head of the socialist PASOK party, Evangelos Venizelos, as saying. "Our motherland can find its way, we will fight for it to find its way."
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The parliamentary election on May 6 saw voters turn against the two main parties that were involved in negotiating the terms of the European Union and International Monetary Fund's bailout packages, PASOK and conservative New Democracy. The left-wing SYRIZA bloc, which opposes the austerity measures, became Greece's second-largest party.
According to Reuters, the latest polls indicate that SYRIZA will place first in a new election.
Greece's creditors have warned they will freeze bailout payments if an anti-austerity government reneges on the country's commitments.
As GlobalPost's Paul Ames explains, that scenario could send Greece bankrupt and force it to leave the euro – spelling "doomsday" for the entire currency bloc:
In the corridors of the European Union’s headquarters the fear now is not only that Greece could be forced out, but that the resultant chaos would spread quickly to Portugal, Ireland, Spain and beyond, causing a collapse of the euro currency and a generalized economic meltdown.
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