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Merkel in crisis talks on Greece

GREEK Prime Minister George Papandreou will hold a teleconference with French President Nicolas Sarkozy and German Chancellor Angela Merkel (right) this evening as a fresh crisis hangs over Athens.

Market investors are increasingly skittish about fears of the insolvency of Greece and rumours of an exit from the Eurozone.

A Greek official said that the conference has been called ahead of the informal talks between EU and eurozone finance ministers and central bankers in Wroclaw, Poland, on September 16.

Athens has been warned that failure to overhaul its economy could affect vital funds from the €110bn EU-IMF bailout that rescued the country from bankruptcy last year.

Meanwhile, France has insisted that none of its banks will be allowed to collapse as market investors continue to be jittery about their exposure to Greek debt.