Political uncertainty lingers in Greece

Charles Grant, director of the CER, said that if Greece defaulted or prepared to leave the euro zone before the bloc could build a big enough bailout mechanism "and before there’s a credible Italian government," it could "bring down the whole euro system."

"That is why Merkel and Sarkozy will do anything they can to persuade whoever is running Greece to take things slowly, to follow the medicine, to carry on pretending they can pay the debt when everyone knows they can't," Mr Grant said, referring to Chancellor Angela Merkel of Germany and President Nicolas Sarkozy of France.