A senior judge will head up the emergency government before Greeks go back to the polls on June 17 for new elections.
Panagiotis Pikrammenos, who is in charge of the supreme administrative court, was sworn in as caretaker prime minister, but will have no power to make political decisions.
This follows the failure by major parties to agree on forming a coalition after the May 6 ballot.
The latest opinion polls show that anti-bailout leftist parties, like Syriza who came second in May, would win this time, with the two main parties who supported the plan losing even more ground.
All this uncertainty led to Greeks withdrawing up to 800 million euros from banks on Monday. However, deposits decreasing by 17 per cent over the last year is also due to cash-strapped people tapping into their savings.
There have been open discussions about Greece leaving the single currency, but the message from Brussels is the bailout plan is the best option.
“We must tell the Greek people that the programme for Greece is the least difficult of all the difficult alternatives,” said European Commission President Jose Manuel Barroso.
Barroso has said “the ultimate resolve to stay in the euro area must come from Greece itself”, but if anti-bailout leftist parties form the next government, it is uncertain if Greece could remain part of the single currency whilst rejecting the plan.