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Greece's Tsipras on shaky ground, warns of elections

Greece's problems are far from over as the country's leftwing prime minister warned that he might be forced into calling an early election if he does not have the support of his party to push through key reforms.

Speaking to a local radio station Wednesday, Alexis Tsipras said: "I would be the last person to want elections, if I had the secured parliamentary majority to make it through to the end of the year," he said, Reuters reported.

"But if I don't have a parliamentary majority, we will be forced to go to elections."

Tsipras' warning comes as talks between Greece and its lenders over a third 86 billion euro ($95.1 billion) bailout are supposed to get underway on Wednesday, but there are already doubts over whether a deal can be signed, sealed and delivered before the next billion euro debt to lenders is due.

Nerves are already frayed on both sides, given the political tensions in Greece over the controversial austerity measures and reforms that had to be passed at a record pace over the past two weeks in order to get a bailout deal.

However there are doubts over whether the technical details of the deal can be hammered out before a 3.2 billion debt is due to the European Central Bank (ECB) on August 20.

A Greek Finance Ministry official told Reuters Tuesday that the heads of the European Commission and International Monetary Fund delegations would arrive on Wednesday for talks on a third bailout program to keep Greece solvent and within the euro zone.

Greek Prime Minister Alexis Tsipras
Ayhan Mehmet | Anadolu Agency | Getty Images

Technical negotiations would be wrapped up by Friday, with "follow-up" discussions over the weekend under exceptional circumstances, he said.

Others in Europe think the talks will take far longer, however, given Greece's recent history in talks – including the five months it took for the country to repeatedly reject demands for more austerity, bringing the country to the brink of bankruptcy.

In the weeks running up to the deal on July 13, capital controls and panic rising over an exit from the euro zone had pushed leftwing Prime Minister Alexis Tsipras into finally relenting to Greece's creditors and agreeing to more far-reaching cuts in return for another desperately needed rescue.

The delegation from the European Commission, International Monetary Fund and European Central Bank (ECB) held preliminary talks with Greek officials in Athens on Tuesday, but talks would officially commence today, according to the Commission. Officials from the European Stability Mechanism (the agency in charge of bailout funds) will also be present for talks.

As is all too familiar when it comes to Greece's financial rescue, the talks were meant to have started last week but were pushed back due to "organizational issues," such as the location of talks and security issues, Reuters reported at the weekend.

Needing a miracle

With delays already plaguing the discussions, there are now doubts over whether a third bailout program can be agreed before Greece has a 3.2 billion euro debt payment to the ECB on August 20.

A so-called "Memorandum of Understanding" needs to be agreed upon in the next two weeks in order for a program – and bailout funds -- to be in place for Greece to make the payment.

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Mina Andreeva, Commission Spokesperson, said in a press briefing on Tuesday that there was no "fixed deadline" for the conclusion of talks. She said that that if all parties kept to commitments made at a July 13 euro summit, "an agreement by the second fortnight of August is possible."

At Wednesday's press briefing, Andreeva signaled talks were making headway, saying "intense work is progressing and we're satisfied with this constructive cooperation with the Greek authorities."

Read MoreTsipras rallies supporters ahead of Greek reform vote

For an agreement to be reached, more reforms in Greece were needed, however.

A European official close to the talks, who asked to remain anonymous due to their sensitive nature, said that a bailout program would have to be concluded sooner rather than later for Greece to make the ECB payment deadline.

"If you want the Greeks to make this payment deadline then talks need to be concluded at least a week earlier. Whether that will happen I don't know, I really don't know."

Michael Hewson, chief market analyst at CMC Markets, thought the completion of a bailout deal by then was unlikely and that more wrangling over reforms were on the horizon.

"With Greece talks already delayed by a week it is highly unlikely that we will see a third bailout agreement concluded in time for the August 20th ECB payment date, which will inevitably mean that the subject of further prior actions (implemented reform measures), and bridging finance are likely to be argued over between now and then," he said in a note.

His skepticism over a deal was reflected by Wolfango Piccoli, managing director of risk consultancy Teneo Intelligence. He said in a note on Monday that "short of a miracle, no comprehensive deal (will be reached) by mid-August."

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And if the pressure of bailout talks were not enough, Piccoli said in a note on Wednesday that Tsipras' Syriza party was "set to split - the question is when."

The comments come ahead of an emergency meeting of the party's central committee that will be held on Thursday.

The rift within the party could further delay bailout talks, Piccoli warned. "Tsipras is facing an uphill struggle to keep his party united and under his control. As a result, the risk of unforeseen intra-Syriza developments that could delay, and at worst derail, the ongoing talks between Athens and its international creditors cannot be discarded."

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