Author: Antonia Oprita

German business confidence came in lower than expected in May, adding to bad news from the euro zone's paymaster and knocking both stocks and the euro lower on Thursday.

European stocks are likely to remain under pressure, and the euro is seen breaking technical support levels, as Greece's inconclusive election results look increasingly likely to push it out of the euro zone, according to market experts and analysts.

The world has "hopefully" gotten through the worst in terms of what some analysts have called "currency wars," according to Chad P. Bown, senior economist at the World Bank's Development Research Group, Trade and International Integration.

A "ring of defense" has to be built around eastern European neighbors Romania, Bulgaria and Serbia to help them cope with the fallout from a possible Greek exit from the euro zone, bankers said on Friday.

The European Bank for Reconstruction and Development (EBRD) expects the economies of Eastern Europe and the former Soviet Union, as well as four countries in the Middle East and North Africa, to experience a "substantial" slowdown this year because of fallout from the euro zone crisis.

"If the currency is not going to exist, it shouldn't be at $1.27," one strategist said, referring to the euro's exchange rate versus the U.S. dollar.

A Greek exit from the euro zone would not make things better for the stricken country or for Europe, Thomas Mirow, the president of the European Bank for Reconstruction and Development (EBRD), told CNBC.com in an interview.

The European Central Bank held its main interest rate at 1 percent and President Mario Draghi refrained from pledging more liquidity in his monthly news conference.

From the same month a year ago, job cuts were up 11.2 percent and so far this year the number of job cuts has increased by 9.8 percent to 183,653, the Challenger, Gray&Christmas report showed.

The British pound is likely to rise further against the euro in the near term despite its fall on Tuesday as it is still seen as a safe play, but in the long term it will weaken, according to currency analysts.