$1 trillion bailout "only buys euro zone time"

If people don't see the governments cutting deficits quickly, there will be a lot of bets being placed against the Euro. My guess is that this pressure will become overwhelming. From Fox News:

BERLIN (AP) — The €750 billion ($1 trillion) rescue loan package only bought euro-zone countries more time, but didn't resolve the continent's underlying debt problem, German Chancellor Angela Merkel and a European Central Bank official said.

The market turmoil will only calm down if the 16 member states of the euro zone reform their economies and reduce their deficits, ECB chief economist Juergen Stark told the Frankfurter Allgemeine Sonntagszeitung newspaper on Sunday.

Stark was quoted as saying about the loan package that "We bought time, not more than that." The euro was not in danger "but in a critical situation," he added.

Merkel on Sunday defended the loan package as the right step to stabilize the currency, but she also acknowledged it only bought time.

"We didn't do more than buy time to get the differences in competitiveness and budget deficits of euro-zone countries in order," she said at a conference of the Confederation of German Trade Unions in Berlin.

The speculation against the euro was only possible because of the differing economic strength and debt level of the euro-zone countries, Merkel said. "If you just ignore this problem, you won't get things to calm down," the chancellor added. . .

Another top German top banker, meanwhile, expressed doubts about Greece's ability to repay its huge debts in an orderly fashion.

Dekabank's chief economist Ulrich Kater on Sunday told German news Web site Handelsblatt that he shares the doubts voiced by Deutsche Bank AG's chief executive Josef Ackermann. . . ..