Good read from The WSJ:
It is difficult to tell just how effective the Greece bailout will be in stemming the contagion spreading to other euroland countries. There are too many ifs. Spain's debt-to-GDP ratio is only about half that of Greece's, and it might escape further downgrading of its debt if its socialist government can be frightened out of its lethargy. But with president José Luis Rodríguez Zapatero insisting the worst is over, stasis is more likely than action. Italy tapped the bond markets for €6.5 billion last week, and found investors relatively eager to buy its IOUs at rates below those on outstanding debt. If it can stick with the spending cuts engineered by finance minister Giulio Tremonti, and bring down its deficit, running at 5.2% of GDP (Greece's is 13.6%), Italy might avoid a downgrade. Portugal has tightened and accelerated its austerity program, and might avoid a further downgrade if it follows through. Ireland's economic-stabilization program and its recapitalization of its banks are deemed to be working, and if the Irish continue to remain on their couches and in their pubs rather than take to the streets, the flow of red ink might abate before the nation's debt level becomes unmanageable. And if British voters put a deficit-cutting government in place on Thursday, the nation might avoid losing its triple-A rating.
Even if all of these ifs come to pass, the world will not return to any semblance of its pre-crisis condition. The days of national fiscal policy determination are over in Europe. EU President Herman Van Rompuy is calling for the creation of an "economic government" run from Brussels, and European Commission chief José Barroso claims the Lisbon Treaty gives him the power of "economic management." National sovereignty takes another hit, courtesy of the Greece crisis and the ever-ready eurocracy.