George Soros has warned that the joint European Union/IMF rescue package for Greece may not be enough.
The legendary investor who forced the pound out of the Exchange Rate Mechanism in 1992 believes that the rescue package is only "a little step" that may not stop Athens falling into a "debt spiral".
In comments picked up by AFP in London Soros said that while the 5 percent rate at which the EU is willing to make loans to Greece is "better than the market is willing to offer…a rescue package should offer concessionary rates."
The EU should now put in place a guarantee mechanism that would allow Greece and other members of the euro zone to borrow at "favorable terms," according to Soros.
This view is common among investors, Jane Foley, director of research of Forex.com, told Squawk Box Europe.
Foley believes the fundamentals of the Greek economy are "awful" and questions how they where able to borrow at such low spreads for so long in the build up to the credit crisis.
"Looking at the fundamentals you have to ask how did the market allow Greece to get away with this for so long," she said.
Greece shocked markets last year when it admitted it had lied about its deficit to make it comply with euro zone rules. Analyst have pointed out that this shook confidence not only in Greece but also in the euro zone's functioning as a single, one-size-fits-all economic area.
Foley believes there is scope for long term pressure on the euro unless Greece is able to cut spending heavily and be in a better position next year or when the next recession hits.
Without these spending cuts Foley predicts Greece will struggle to sell longer term 5- year and 10-year debt to a market skeptical of prospects for default over the medium term.