JOEL HILLS: Share prices around the world slid today as Greece continued to struggle to form a new government. The stock market in Athens closed this evening at its lowest level in 20 years. First the centre left, the New Democracy Party, failed to form a coalition and now the left wing Syriza Party is having a go, the party’s leader Alex Tsipras said he would use the three day mandate to pull together a government that would reject what he called barbaric austerity measures imposed on his country as part of its bail out deal. Sky’s Jason Farrell joins me now live from the Greek capital, Athens.

JASON FARRELL: Well this really, Joel, is a moment in the sun for Alex Tsipras and he’s going to use it for three things. Firstly, to try and form that coalition which I have to say is unlikely, the numbers don’t really add up. He will also, secondly, use this time to see if he can pull together allies for a potential next election so when some of the parties have come forward and said that they endorse him as he is hoping they do, then of course he can also talk to them about what their strategy is for the next election but the third thing is he is really pumping up his anti-austerity rhetoric and today he has come out and said that the austerity measures are pretty much invalid because the Greek people have voted against them and he also told the other parties that they should write to the EU and tell them that they retract their signatures from those austerity agreements. So really it is all about his rhetoric, all about anti-austerity but at the same time he is trying to form a coalition and potentially look ahead to the elections, if they’re coming again.

JOEL HILLS: Okay, Jason Farrell in Athens, thank you for that update. I am joined here in the studio by Professor Christopher Pissarides who is the Nobel Prize winning economist and Chairman for the Centre of Economic Policy Research. A very good evening to you, as we were hearing from Jason there in Athens, he doesn’t seem to have made much progress so far but Mr Tsipras is clear that he feels that the EU and the IMF bailout is now invalid as a result of the vote over the weekend, he wants an International Commission to investigate whether Greece’s debt is legal. What happens if this man manages to form a government?

PROFESSOR CHRISTOPHER PISSARIDES: Well the way I see the situation now is so bad that I can’t imagine it being worse because it has suddenly introduced so much uncertainty into something that was agreed before by the two main parties. I mean admittedly the situation in Greece down at street level if you like was really bad, the austerity measures were very hard to take but some kind of austerity was necessary, maybe not as much as there was but it was absolutely essential to embark on a reform programme in the only way they could have gone on to a reform programme that would have given results in the medium to long term was to have austerity in the short term, I don't think there is any other solution for Greece.

JOEL HILLS: Is Mr Tsipras right though when he says that the vote at the weekend was essentially a vote on austerity and what the Greek people did in an overwhelming majority is they have rejected the bailout deal, it is now invalid? Is that the way you see that, interpret that?

CP: It was definitely a vote against austerity but voters vote with their heart very often. The situation has been so bad for two or three years now, they said enough is enough, we don’t like this, we’re going to vote no but what’s the alternative? No politician from the smaller parties came up with any alternative. They say no, we’re going to renegotiate but you are going to renegotiate under what terms? There was no programme that said this is what we want to achieve and we are going to try and achieve, it was just we don’t like what has been agreed before, vote no.

JOEL HILLS: Because we have this contradiction here don’t we because all of the polling seems to suggest that the Greek people want to remain within the Eurozone but at the same time they don’t like the idea of austerity. They have to have both do they not?

CP: That’s what they want but it is not possible to have both, you cannot stay within the euro and not follow the rules of the euro. Now austerity requires more taxes, it requires pay cuts and all that and they may say okay, we didn’t need as high tax rates as we’re having now, maybe the government should get its act together and collect more tax from those that owe it so that we don’t have to go on to the high rates we’re on now but these are small things compared with the no vote now.

JOEL HILLS: Would another election deliver a different result do you think?

CP: Well I can’t see why anyone would go and vote differently now they have had this result than what they voted only a few days ago. If any programme crystallises how these discussions they are having now, for example the leader of the centre right New Democracy who had the majority said within a day that he could not form a coalition.

JOEL HILLS: He said it within five hours!

CP: Yes, within five hours. Now if he explains why, what he supports and what those parties that he approached support and that was no then maybe voters would be better informed in a next election but you do need to have some kind of programme coming out, some suggestions coming out of these negotiations other than just say renegotiate, don’t renegotiate.

JOEL HILLS: Well Professor Pissarides, you don’t sound very optimistic, we’ll have to see what happens in the next few days.