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Greece in 'critical' situation as Syriza leads polls


Experts are warning that the political situation in Greece has become "critical" with left-wing, anti-bailout party Syriza forecast to grab the largest share of votes in this month's snap general election.

Ahead of the election on January 25, opinion polls point to a Syriza victory. However, while investors know the current coalition government will work to ensure Greece remains on the right track and stick to the spending and reform measures laid out in the country's bailout program, Syriza remains a highly risky unknown quantity.

Situation in Greece 'critical' in election build-up: Pro

"The situation in Athens is quite critical at the moment because we see that a new government and new party could be in power, according to the polls but markets don't know the economic program of Syriza," Nikolaos Georgikopoulos, visiting research professor at the NYU Stern School of Business, told CNBC Monday.

"This uncertainty could have an effect on the economy, especially in Greece where the economy is still fragile," he said, adding that the possibility of a Greek exit from the euro zone should be taken "very seriously."

Read MoreShould markets fear Greece's radical Syriza party?

Syriza holds the lead against Prime Minister Antonis Samaras' New Democracy party in nine opinion polls published in the Greek media over the weekend.

Allan Baxter | The Image Bank | Getty Images

Collating the reports, the Wall Street Journal reported Sunday that the polls showed that Syriza party could win the vote by a margin of between 2.7 and 8 percentage points, though with most of them showing a difference of around 3 percentage points on average. A tenth poll in a pro-Syriza newspaper gave the party an 8 percentage-point lead.

Greece is more stable economically now than in 2012, following several bailouts totaling 240 billion euros ($283 billion) and the implementation of tough cost-cutting measures. However, the cuts imposed by the Troika of organizations – Greece's fellow European countries, the European Central Bank and the International Monetary Fund -- have proved very unpopular with the Greek people.

Read MoreEurope gets ready for another Greek drama

This has helped Syriza -- which campaigns on an anti-austerity platform -- gain voters. Syriza has always said it would seek to renegotiate Greece's bailout agreement but any disagreement with international lenders could push Greece dramatically out of the euro zone.

'Volatility and turbulence'

Although Greece finally exited six years of recession last year there are fears, then, that a Syriza win could severely damage the country's fledgling economic recovery.

Speaking to CNBC from Athens, Georgikopoulos said that Syriza's economic policy could be determined by either the more radical or moderate elements within the party, though he hoped that the latter would prevail.

"I hope the moderates will be in charge and they will think that the economy cannot sustain more volatility and turbulence." He added that Syriza should agree it economic program with the troika of international lenders – the European Commission, European Central Bank and International Monetary Fund – and how they will keep Greece's economy on track.

"I hope a new government will think twice about the future of Greece - and the future of Greece is in the euro zone."

Not everyone is so keen to keep Greece in the euro zone at all costs.

One of Germany's leading economists and the head of the influential Ifo economic research institute in Germany, Hans Werner-Sinn, said on Sunday that Greece needed a devaluation of the currency, a temporary Greek exit and a haircut on its debts.

Calling for an international debt conference on Greece, Sinn said in a statement on Sunday that for Greece "to get back on its feet economically and become competitive again" "this calls for a devaluation of its currency, thus a temporary euro exit, which, in turn, calls for a haircut," he said.

Greece will never be in a position to repay its debts in any case and its government is already facing the threat of another insolvency, just like back in 2012, Sinn warned in the statement.

Grexit on the cards?

Kit Juckes, global head of Foreign Exchange Strategy at Societe Generale, agreed that a Greek exit – or "Grexit – would be "one possible solution" to the country's political and economic problems but he thought it an unlikely outcome. Rather, he believed the election result would lead to more wrangling between Greece and its lenders over the country's bailout.

"There has been some kind of assumption at least at some level in markets that Syriza win, they refuse to work with the troika and the Germans force them out and it's a disaster and if they don't win, then it's ok -- but it's going to be much, much, much more complicated than that."

Juckes believed that a Syriza win would not see Europe walk away from Greece, saying that there would have to be a deal between international lenders and Greece to soften austerity measures.

"I think what we'll see is a Syriza win, followed by torturous negotiations (between the party and troika)."

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