ANZ Bank chief economist Cameron Bagrie says relief from an agreement by Greek leaders to form a coalition government and approve the euro zone bailout deal will be short lived.
Beleaguered Greek Prime Minister George Papandreou will step aside as part of deal to form the unity government demanded by the country's European partners in order to go ahead with the €130 billion bailout deal.
But attention has now turned to Italy, where the Government's borrowing costs have risen to record highs as worries about political uncertainty intensify.
Mr Bagrie says the developments in Greece are a welcome short-term reprieve but the region's challenges have not gone away overnight.
He says Europe could slip into another recession since the data is "pretty poor" and markets are now looking beyond Greece to larger nations such as Italy.
Mr Bagrie says New Zealand's economy is holding up well, even as the global economic turmoil shows no signs of abating.
But he warns that commodity prices are down "a bit" and could be affected by further serious downturns in the global economy.
Another uncertainty for New Zealand, he says, is cost of funds since the country is a net borrower overseas.
However, he says New Zealand is generally showing "relative resilience" and is "holding in an awful lot better than most".
Mr Bagrie says the odds are that some countries are slipping into recession at the moment.
