Greece’s finance minister has resigned because of ill health, throwing the government’s drive to soften an international bailout into confusion.

Polls planned for next month may produce no clear result and could threaten the implementation of the bailout plan that saved Greece from bankruptcy.

Greece’s Lucas Papademos will seek to take advantage of a rare political truce to push austerity and radical reform and stave off bankruptcy.

Italian Prime Minister Silvio Berlusconi lost his parliamentary majority on Tuesday and his opposition are calling for his resignation.

Under pressure from the EU to push through a bailout to save their country, Greek party leaders were struggling to agree on a new prime minister.

George Papandreou’s shock announcement that he will put Greece’s bailout to a referendum has threatened to intensify the eurozone crisis.

Troika inspectors gave a lukewarm approval for a vital aid tranche to Greece, saying Athens was lagging on reforms needed to exit its debt crisis.

Greek police with teargas and batons fought hooded youths near Parliament on Tuesday as violence broke out at a rally against anti-austerity measures.

Greece’s government faces an electorate opposed to austerity measures which must be passed in Parliament next week to avert default.