The pattern of growth is critical because, under this program, Greece needs to grow out of its debt problem soon. Greece's debt-to-G.D.P. ratio will be a debilitating 145 percent at the end of 2011.

Now consider putting more realistic growth figures into the I.M.F. forecast for Greece's economy - e.g., with G.D.P. declining 12 percent in 2011, then the debt-to-G.D.P. ratio may reach 155 percent. At these levels, with a 5 percent real interest rate and no growth, the country needs a primary surplus at 8 percent of G.D.P. to keep the debt-to-G.D.P. ratio stable. It will be nowhere near that level. The I.M.F. program has Greece running a primary budget deficit of around 1 percent of G.D.P. in that year, and that assumes a path for Greek growth that can be regarded only as an "upside scenario."

The politics of these implied budget surpluses remains brutal. Since most Greek debt is held abroad, roughly 80 percent of the budget savings the Greek government makes go straight to Germans, the French and other foreign debt holders (mostly banks). If growth turns out poorly, will the Greeks be prepared for ever-tougher austerity to pay the Germans? Even if everything goes well, Greek citizens seem unlikely to welcome this version of their "new normal."

Last week the European leadership panicked - very late in the day - when it realized that the euro zone itself was at risk of a meltdown. If the euro zone proves unwilling to protect a member like Greece from default, then bond investors will run from Portugal and Spain also - if you doubt this, study carefully the interlocking debt picture published recently in The New York Times. Higher yields on government debt would have caused concerns about potential bank runs in these nations, and then spread to more nations in Europe.

Eoin Treacy's view I commented on the illustration mentioned above in Comment of the Day on Wednesday and commend it to subscribers as a handy depiction of the outstanding liabilities in the European sovereign debt market.

I compiled this table of CDS spreads using the Chart Library's Favourites function and the Performance Filter. Here are links to instructions on how to perform a similar operation:

How do I create a list of my favourite instruments?
How do I use the Chart Library's Performance Filter?

This table helps to put in perspective various European countries' debt compares with that of the rest of the world. For example Greece (934 basis points) now has a similar spread to Argentina (988bps). Dubai (447bps) and Portugal (439bps) have similar spreads. Spain (265bps) and Ireland (264bps) are both currently deemed to be more risky that Egypt. Italy (219bps) has a higher spread than Turkey 213bps). However, while side by side comparisons are of interest, the trajectory of various spreads is of more importance to investors.

Markets continue to price in the newly accepted reality that peripheral Eurozone countries are not in the same position to service their debt as Germany given the constraints of the Euro. Sovereign spreads reflect this, with Greece, Portugal, Ireland, Spain and Italy all heading higher. None of these spreads have demonstrated that they have achieved a new equilibrium relative to German Bunds, suggesting potential for further expansion. CDS spreads for Greece, Portugal, Ireland, Spain and Italy have similar characteristics to their respective sovereign spreads.

The 5yr CDS spread on Greek debt is 933 basis points versus a 14.91% 5yr yield, leaving a 'hedged' return of 5.58% in Euro. When one considers the difficulties of actually making good on the insurance offered by CDS in the event of a default and the weakness of the Euro, such debt compares badly with what is on offer in other less risky jurisdictions. Given the fact that sovereign spreads are expanding in the Eurozone periphery and with the associated risk premiums keeping pace, one needs to question whether the respective sovereign markets are worth participating in at all.

CDS spreads for just about every country in the Eurozone have risen over the last few weeks as the full scope of how much debt is outstanding and who owns it has become clear. Eastern European CDS spreads have been contracting since March 2009, but Hungarian, Polish, Turkish, Bulgarian and Slovakian spreads all rallied this week to break their progressions of lower rally highs, signalling the beginning of a risk reassessment on the associated bonds. Such action suggests that the extent of Europe's worries may not be limited to the Eurozone, but could also extend to the Eastern Europe and beyond the Eurozone.

Turkey, Poland and Hungary all pulled back sharply this week and will need to find support in the proximity of their 200-day moving averages and sustain their progressions of rising reaction lows if the medium-term bullish outlook is to be sustained.