Willem Buiter, chief economist at Citigroup, said he thinks that after Spain's still-to-be-finalised euro area bank bail-out, the country could end up entering a troika bailout program -- and that this could happen soon.

After Spain's bank bailout, he also foresees Cyprus or Italy becoming the next euro area countries to apply for a troika bail-out.

Buiter believes that Spain and Italy's need for a sovereign bail-out would be driven by a lack of affordable access to market funding and their lack of credibility in demonstrating a commitment towards fiscal and structural reform.

Conditions for these bailout programs, said Buiter, would most likely include the countries undergoing fiscal and structural reforms. They would also like aim to retain partial market funding access for Italy and Spain, relying on a mix of European Central Bank-subsidized funding and financial repression to ensure the take-up of residual government funding needs by domestic banks and other financial institutions.

He also said that Spain or Italy may be able to access one of the precautionary European Financial Stability Facility or European Stability Mechanism programs, but that they would likely come with conditions.

"Any program would require a request from Spain or Italy and unanimous non-objection by the Eurogroup," he said.

Right now Buiter thinks it's unlikely that Italy or Spain would meet the conditions for a precautionary International Monetary Fund program, but thinks that the IMF could contribute to the funding of a 'normal' troika program.

Both the FTSE in London and DAX in Germany finished flat.

German market research group GfK predicted Tuesday that its consumer sentiment index for Germany will improve in July for the first time in five months, rising to 5.8 from 5.7 in June, as an improvement in income expectations helped offset some worries about the economic impact of the eurozone turbulence.

If you liked this article you might like

Forecast for S&P 500, Dow Industrials Remains Bullish, These Charts Show

Dow 20,000! It Should Mean Nothing to Investors, but Then Again...

Tradebird Investors Are Bullish on U.S. Stocks but Bearish on the Euro

Why Home Depot and Boeing Stock Fell Tuesday