Spectre of a 'Grexit' returns

Greek ten-year bond yields jumped by nearly a percentage point last Tuesday as stocks plunged by 11%, the worst daily drop since 1987. The panic came after Greece's prime minister called a snap presidential election for next week.

If Prime Minister Antonis Samaras's government loses this three-stage vote in parliament, which it easily could, he will be obliged to call a general election.

The left-wing populist, anti-austerity Syriza group, which is leading in the polls, is in a strong position to win it, potentially leading to a chaotic Geek exit, or 'Grexit', from the eurozone.

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What the commentators said

These have been bogged down in parliament, and winning what is effectively a vote of confidence should allow the government to regain the initiative, hopes Samaras. But "the vote will be tight".

Syriza has tempered its rhetoric lately and may not deliver a "forgive our debts or we'll march out of the euro" ultimatum, said Alen Mattich on wsj.com. But there will be "plenty of scope for friction" as it "presses hard for debt relief", and astand off could mean fresh calls for an exit from the single currency.

"At that point, all bets are off. The anti-austerity revolt in Greece could easily spread," said Philip Aldrick in The Times. "Economics and politics keep getting in the way of finding a... lasting way for 18 disparate nations to share a single currency." All this threatens to make the debate over quantitative easing by the European Central Bank "seem like a sideshow".

Most worryingly, eurozone politicians, as ever, seem to be asleep at the wheel. The EU's economics commissioner, Pierre Moscovici, thinks markets should have been reassured by Samaras's move. "Oh dear."