Greece faces crisis on prospect of snap election

An early general election in Greece is looking more likely than ever after the first round of a snap presidential election failed to win the government support on Wednesday.

Prime Minister Antonis Samaras's preferred candidate for president – Stavros Dimas – failed to gain the required 200 votes in the first round of a snap presidential election, gaining only 160 votes.

The result raises the chance of a general election, and there is a distinct possibility that the left-wing, anti-austerity party Syriza could win such a vote – potentially putting the country's international bailout into jeopardy.

Read MoreGreece could miss New Year's end-of-bailout celebration

Greece's parliament building
Amos Chapple | Lonely Planet Images | Getty Images
Greece's parliament building

Syriza currently holds a 3.6-percentage-point lead over the ruling conservatives, a poll published after the first round of a presidential vote on Wednesday showed, Reuters reported.

"There's no doubt that Syriza has had all the momentum politically in the last year to 18 months in Greece and the unpopularity of the bailout is something that is very (prevalent) with Greeks," David Lea, senior analyst at Control Risks, told CNBC's "Capital Connection" on Wednesday.

The party has always said it would scrap Greece's tough austerity policies which were a condition of its two 240 billion euro ($296 billion) bailouts implemented by the International Monetary Fund, European Central Bank and European Commission.

Read MoreProtests in Greece expected over high unemployment

Greece is approaching the end of its bailout program, but still needs to implement further austerity measures in order to receive a last tranche of aid from lenders.

'Fundamental political differences'

There will be two further rounds of voting on December 23 and December 29, and if the Greek parliament fails to elect a new president in those votes, a general election will automatically be called.

The number of votes a candidate needs drops to 180 in the final round on December 29, but with Greece's political system as fractious as ever, it looks unlikely that Dimas will gain the support that he needs, analysts said.

Lea said it was not "realistic" to expect that Dimas could gain enough votes in the presidential election.

Read MoreGreece's presidential election: Why it matters

"Somehow we're going to get early elections and I don't see the parliament lasting to its full-term in mid-2016," he said.

In a note following the result, Wolfango Piccoli, managing director of risk advisory firm Teneo Intelligence, agreed, saying that Greece would likely go to snap polls in late January/early February.

Samaras could swap Dimas for a more left-leaning candidate, Piccoli said, but he added: "Given the fundamental political differences over government policies rather than about individual presidential candidates, it remains dubious whether this move could do much to boost the government's chances."

Debt issues

Although Greece appears to be on track for a primary budget surplus in 2014, the country still has an enormous debt pile of 175.5 percent of GDP, according to the European Commission, and it needs political credibility in order to soothe international investors.

The chief economist at one of Greece's largest banks, Alpha Bank, told CNBC on Thursday that Greece's debt was "manageable" and that structural reforms were helping the economy to recover.

Michael Massourakis added that investor concerns over Greece's political stability were an overreaction although the markets would beg to differ. When the snap presidential election was announced last week, the Athens benchmark stock index plunged almost 13 percent. On Thursday, the index was down 0.3 percent in early morning trade.

Read MoreWhy the Greek selloff is exaggerated

"They (markets) are overreacting…Of course, there is political uncertainty and I don't deny that, but this is not a country that deserves this kind of expectations (of more economic turmoil) from the markets."

- By CNBC's Holly Ellyatt, follow her on Twitter @HollyEllyatt. Follow us on Twitter: @CNBCWorld