( CNN ) -- The European Commission is warning one of its members that stimulus spending , growing debt and a slower than expected recovery has become a volatile cocktail . No , it 's not Greece . It 's the UK . Whichever party wins Thursday 's general election will steer the fortunes of the world 's fifth largest economy , an influential global financial center and a deficit that the European Commission forecasts will rise to 12 percent of GDP in 2010 -- even higher than Greece . ( Greece 's 2009 deficit stands at 13.6 percent -- the commission estimates it will drop to 9.3 percent this year ) . The elections come as the financial world has been roiled by events in Europe , such as the growing debt crisis of Greece , Spain and Portugal and the massive economic disruption of the Icelandic volcano . Narrow pre-election polls point to a possible hung parliament for the first time in 36 years , which could further add uncertainty to already shaky global markets . The markets did n't react when UK elections were called a month ago , but that may soon change after the polls are closed : For the first time , London traders have been allowed a special election night session to trade bond and sterling futures -- and they 're expecting heavy action as banks try to stake out positions , rather than wait for the usual 8 a.m. open on Friday . The UK `` is a financial mega-center , so for us as a financial institution we care very much ( about the election ) , '' said Julia Coronado , senior economic analyst for BNP Paribas in New York . '' In the global banking world we are very aware , more than ever , about what 's going on in continental Europe , what 's going on in the UK , what 's going on in China , all of these things are much more interwoven now . `` There 's clearly two very different views of the world represented in this election , and I think if we look at it from the economics point of view it certainly has implications for the growth potential of the U.K. ( and ) for the regulatory environment in the UK , so that could impact the financial industry very significantly , '' Coronado said . So far , the major parties have n't provided many specifics about how they plan to tackle the UK 's growing deficit , which crediting ratings agencies have warned may eventually impact its AAA rating . ( Greece 's credit rating was downgraded to junk status last week , sparking a weeklong decline in global markets ) . Are the ratings agencies credit worthy ? `` I 'm concerned about ( the deficit ) in the medium to long term , but in the short term we need to keep this recovery going . What has been driving this is public sector stimulus and the difficulty is we have seen very little action in the private sector , '' said David Blanchflower , a former UK monetary policy adviser and economics professor at Dartmouth University . `` Firms are n't investing and they are n't hiring , and if we pull public sector stimulus away the danger is we drop off a cliff . '' While the deficit is worrying , market watchers point out that London is no Athens . `` We do n't have a bad track record . We should n't be compared to Greece , '' said David Buik , of BGC Partners . `` This is actually a buoyant economy , in the fullness of time . It 's just the fact that the election really has gotten in the way of reality . '' Some worry that a hung parliament and any resulting coalition government may be fractious and short-lived . The last coalition government in 1974 lasted only seven months before new elections were called . `` One benefit I think of actually having a hung parliament is that maybe it rules out the possibility that anybody would do anything stupid , '' Blanchflower said . `` At this moment the status quo is perhaps not a bad thing to be in . CNN 's Jim Boulden , Brian Walker , Richard Quest , Kevin Voigt and Max Foster contributed to this report .
Elections hold fate of the world 's fifth largest economy and a major financial center . World markets will watch carefully the outcome of election as eurozone troubles escalate . The UK has the largest projected deficit in 2010 , according to the European Commission .