Greek lawmakers' vote of confidence in Prime Minister George Papandreou is a "minor step" on the road to a likely default, an economist says.
Greece would probably need to restructure its debt in addition to cutting the deficit and selling state assets, said Larry Hatheway, the chief economist at UBS Investment Bank.
Ireland would also probably need to reorganise its debt, while that outcome was less likely for Portugal and Spain would avoid the move, he said.
"What's going to still be required is very tough measures in countries in southern Europe around fiscal austerity and privatisation.
"It certainly has been our base case going back over a year now that Greece would need to default on its debt," he said. While the vote of confidence in Papandreou was "a minor step", Hatheway said it was "by no means a panacea".
The International Monetary Fund, contributor of a third of the bailout money for Greece, Ireland and Portugal, has warned EU leaders that a failure to take decisive action on the debt crisis risks triggering "large global spillovers".
While Papandreou won a vote of confidence from 155 of 300 lawmakers, he needs parliamentary approval for a €78 billion ($138 billion) package of budget cuts to stave off default.
European finance ministers said this week they would hold off a €12 billion payment for July until plans to cut the deficit, sell state assets and impose a levy on wages are passed.
"The choices that face core Europe will be which way they pay the bill, not whether they have to pay the bill," said Richard Hoey, chief economist at Bank of New York Mellon.