By David Oakley in London and Ralph Atkins in Athens, FT.com
(FT) -- Emergency moves by the European Central Bank on Monday and the €110bn ($145bn) international rescue package agreed over the weekend have failed to quell investor fears about the future of the euro zone as concerns have risen about other member countries' stability.
Investors said contagion could hit weaker euro zone economies, such as Portugal and Spain, with some warning they may also need to be salvaged.
The fresh fears sparked a 0.9 per cent fall in the euro against the US dollar and saw Greek stocks end the day lower, although bond markets across Europe were stable with yields on two-year Greek debt dropping below 10 percent for the first time in more than a week.
Speculators are increasingly betting that the euro zone crisis could escalate as short positions against the euro rose to a fresh record.
This is a sure sign the 16-country bloc could come under further selling pressure in coming weeks, investors say.
Mohamed El-Erian, chief executive of Pimco, the world's second biggest bond fund, said there were still doubts about the Greek rescue package.
"The announcements will not mark the end of the Greek debt crisis; nor will they constitute a much-needed turning point that can be sustained for many months," he said in an FT.com comment article.
Ulrich Leuchtmann, at Commerzbank, added: "French and German governments still have to agree the package, so uncertainty persists, while market concerns regarding the likes of Portugal and Spain remain unaddressed".
There are also concerns that political instability in Greece could undermine the government's resolve to stick to the austerity programme.
Reversing past pledges not to favor one country within the euro zone, the ECB announced it was suspending the minimum credit rating requirement for Greek government bonds used as collateral in its liquidity operations.
The move removes worries that Greek banks would not be able to tap the ECB for emergency funds.
Poul Thomsen, deputy director of the IMF's European department, said Greece could return to markets once confidence in the programme had built-up.
"I expect them to come back to the market this year, but if market sentiment remains very negative, they don't have to," he said.
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