Last weekend and before that, we traded Greece (PIIGS) bond spread for Euro weakness. When not dealing with the debt overhang + no growth, there is no chance of stabilising the situation anytime soon 

• PIIGS speculation could continue. 
• Bailout does not prevent contagion. 
• Other PIIGS need to hurry up to get fiscal consolidation and implement budget cuts. 

via Carsten Brzeski, a senior economist at ING Belgium SA, talks with Bloomberg

Point made, it takes off the market pressure from Greece. But not other Eurozone peripheral countries. Bond vigilantes are on the move. 

“The bond vigilantes are walking out on Greece, Spain, Portugal, the UK and Iceland,” said Roubini, a former adviser to the US. “The thing I worry about is the build-up of sovereign debt. Greece is just the tip of the iceberg, or the canary in the coal mine, for a much broader range of fiscal problems.” (via Nouriel Roubini, Guardian)

See here the same hypothesis put differently (video). 

• bailout and ECB waiver of collateral establishes dangerous precedent
• bailout is short-term pluck
• Spain is massive, banks highly leveraged due do construction boom they had and high unemployment (+20%). Under in the segment of under 25y its over 40%.

Another opinion (video);

• bailout is short-term pluck, bailout works against history.
• bailout inspired very little confidence in markets, bailout does not solve Greeks problems, austerity measures hard to implement, default inevitable.
• Germany will not put up another billion dollar package for Greece or any other package for another country
• Greece will either remove itself from the EMU or Germany will demand that Greece is being removed from the EMU within the next 12 or 24 months
• Politicians look helpless in their action
• Future events (increased severity, solvency problem long-term) [VIDEO] will force officials of the EMU to implement monetary and fiscal reform and new regulation - but currently it is not a reality.
• Until it is settled, we will have problems.

Here another one (video);

• Banks will take haircut on PIIGS bonds
• Policy of fiscal aid (bailout) bought Greece some time, bailout is a step forward in the short-term, but 2 steps back in the long term (1-2 years forward)
• Outlook not rosy for bond market, bond market becomes politicised. 
• Danger looms in the long-term, drives investment decision over the coming months.

European leadership lacks vision and leadership (video). Leader ship has to take very strong action (bold) to reinstate the confidence and credibility in the Euro (video) and its monetary union. It is not just Greece or Spain and other peripheral countries. It is the structure of independent fiscal policy and same monetary policy for all EMU member states. It didn’t work really well in the past and markets see that it does not work now and in the future.

Gordon Brown talking about Conservative implementing budget cuts within 50-days after the election in case they win.

I just want to remind everyone. Budget cuts within the next 9 months will be inevitable, whether you vote Labour, Conservative or Lib Dems. The markets will force it upon this nation.

As we have learned during this brief time of financial upheaval, things usually get worse till they get better.

What Brown said is lie. He is misleading the public. He still is Prime Minister, and saying such things is pure manipulative of the public, misleading, a lie.

Bond fund managers have called for steep cuts in welfare spending by highly indebted European countries to avoid a repeat of the Greek crisis. Spain, Portugal and Ireland have already been targeted by speculators. Some economists have included Britain and Italy in the European “circle of doom” countries that ring the more financially secure nations of France and Germany.

Last week the National Institute of Economic and Social Research (NIESR) said Britain was unlikely to come under the same pressure as Greece, Spain and Portugal because it was able to devalue its currency and trade its way out of recession. Britain remains the world’s sixth-largest exporter in the world. Sterling has fallen from $2 before the crisis to $1.70 early this year to $1.50 last week, giving exporters a boost as prices of their goods fall. (via Guardian May 3rd 2010)

And giving consumer a hard time on the till, especially petrol (oil), gas, travel tickets. As a world deeply intertwined, the weakness of the pound will push up the CPI and RPI. Inflation will remain at alleviated levels above 2 if not over 3% year over year.

Which implies with the current overall world outlook, the perspective shifts towards double-dip, all things considered.