Politicians fear tumbling stock markets and bank failures if voters fail to elect a pro-European government on Sunday
European leaders are seeking to calm fears that the Greek election would trigger a Lehman Brothers-style run on eurozone banks after polls showed the leftist Syriza group could deny pro-austerity parties overall control in Sunday's election.
David Cameron joined the German chancellor, Angela Merkel, and the French president, François Hollande, in emergency talks to prepare for the aftermath of a vote that the historian Niall Ferguson warned was "the financial equivalent of the Cuban missile crisis".
Stock markets are expected to fall when they open on Monday if voters fail to produce a clear result, as happened in May. Leaders also fear a mass withdrawal of bank savings, forcing governments to launch expensive rescue bids for vulnerable banks or risk a destabilising collapse.
Greece's interim prime minister warned that the country was at a critical juncture because the election could determine its future in the eurozone. The brinkmanship between Athens and Brussels appeared to be giving way to a final confrontation.
Panagiotis Pikrammenos, the prime minister, spoke of "dangerous inertia" in state operations and the need for "critical" decisions to be made after a two-month delay in promised reforms while back- to-back electoral campaigns were held. Greece is holding its second election in six weeks with all leading candidates now calling for some renegotiation of a bailout deal despite warnings that Greece must toe the line or leave the euro.
Alexis Tsipras, the leader of the Syriza group, repeated his threat to tear up the agreement between Athens and Brussels and call Europe's bluff. He said the eurozone will not eject Greece for fear of the consequences for other indebted members, such as Spain and Italy. His main rival, Antonis Samaras, said Greece risked becoming a pariah if it defaulted .
Greece has already negotiated with its private sector creditors a €105bn (£85bn) cut in its loans, which was expected to reduce its debts from almost 190% of national income to nearer 130%. It was offered a second package of loans earlier this year in return for public sector spending cuts and economic reforms, most of which have yet to be implemented.
Samaras, in his final rally, said Greeks were deluded if they believed they could avoid much needed reforms and the vote was between the drachma and the euro. "If we cancel the bailout plan, we will turn into the black sheep of Europe," he said, imploring voters not to trust Tsipras.
Samaras is the bookmakers' favourite, but is still expected to fall short of an overall majority following strong showings for the far right Golden Dawn party and Tsipras's Syriza leftist coalition.
Niall Ferguson, the Harvard historian, commented: "If there's going to be a Lehman moment in the crisis it's going to be next week." He likened negotiations between Athens and Berlin to "a game of chicken" that will continue while Athens is plagued by hung parliaments. "It's not clear who's going to blink at this point. My guess is that, in the end, there will be a bit of blinking on both sides.
"This is the financial equivalent of the Cuban missile crisis. And the missile is really a bank run, which ultimately even the Germans can't be completely immune to. Not that there will ever be a run on German banks, but the effects of a bank run across southern Europe are going to be felt by the economy. German policymakers know that; they're having to say one thing to their own voters and another thing privately to other European leaders."
Merkel has warned that eurozone countries must follow agreed austerity measures in speeches in recent weeks designed to warn Greek voters that a new loan deal is out of the question. However, she has come under intense pressure to take a more kindly view of the situation after the Spanish bank rescue, which it is understood Madrid won on easier terms.
Holding her tough line is also expected to become more difficult after the International Monetary Fund said Spain would miss its deficit reduction target this year and Ireland would need softer terms on its existing bailout to survive.
Brussels is duty bound to fine Madrid for missing deficit reduction targets, something it will find difficult to justify only weeks after it sanctioned the €100bn rescue of Spain's smaller banks. Dublin has pleaded for easier terms on its loans on several occasions only to be rejected.
The review by the IMF – one of three lenders, with Brussels and the European Central Bank, funding eurozone bailouts – will further isolate the German leader, who told her parliament on Wednesday that Germany could not be expected to dig deeper to fund easier terms.
"Germany's strength is not unlimited," she said. "The way out of the crisis can only be successful if all countries are capable of recognising the reality and realistically assessing their strengths."
There are rising concerns that Italy's economy is only months away from needing a rescue deal.
