German Chancellor Angela Merkel yesterday attempted to calm the market by saying her country felt "an enormous obligation to guarantee the stability of the euro" as the market began to question if other members of the so-called 'PIIGS' might be about to follow Athens into what George Soros has called the 'debt spiral' Her comments where a classic case of too little, too late after weeks of her government making it as clear as possible that it was very unhappy about the prospect of bailing out Athens.
- Watch the full interview with Axel Weber above.
The German press has been rife with claims the rescue would lead to similar claims from the likes of Portugal, Spain and even Italy and some in the market clearly agree, pushing yields on all 3 countries debt higher in the wake of the IMF/EU rescue package Germany reluctantly agreed to after weeks tough talk.
Goldman Sachs chief economist Jim O'Neill told CNBC last week that Germany had finally found a way of pushing the euro lower to boost exports.
O'Neill claimed Berlin was happy to watch Greece struggle as it was pushing the euro lower against the dollar and, by extension, the yuan.
This stance has angered the French government, which believes Merkel and her government should never have allowed the IMF to take part in the rescue and is now questioning Germany's commitment to the euro project.
The 100 pound gorilla in the room is the prospect that Greece's problems are just the start of a bigger crisis that will ultimately kill the single currency.
Jim Rogers, Marc Faber and George Soros have all been very vocal on the prospect of a euro crisis in recent weeks and many others in the market see a one-way bet that will make them huge profits.
Those short the euro reason that Greece will not be able to sell tough austerity measures to their electorate and will be forced out of the single currency after failing to get to grips with ballooning welfare programs.
They reason that a similar dynamic will hit Portugal, Spain and the even the euro zone's third largest economy, Italy.
Axel Weber dismissed this idea in his interview with Maria Bartiromo last night, saying Portugal and Spain are in a totally different space.
"Greece had a deficit even in the good times.
I would really draw a strong difference between those countries.
Let's not throw it all into a basket," he said.
Unfortunately Portugal, Spain and Italy are in the same basket says Simon Derrick, the Head of Currency Research at Bank of New York Mellon.
While these three countries have not been fiddling the data in the same way as Greece, they all face a similar problem, according to Derrick.
That problem is German competitiveness and their inability to keep up with productivity gains in the euro zone's largest economy.
Greece and other euro zone members can no longer devalue their way out of this problem and instead they can only take the pain or restructure their debt.
If Greece restructures, then why would Portugal not follow suit asks Derrick.
"The risk-adverse investors will stay clear of the Southern European nations," Derrick said, pointing to comments from Chinese officials in recent weeks as a sign that there is a very real risk of contagion.
"If the Vice President of the People's Bank of China is worried about this threat then Beijing must be considering exiting the market for debt issued by the so-called PIIGS," he said.
As the world's biggest buyer of sovereign debt the Chinese leaving this market could very well add to the euro's problems.
The euro is going lower over the short and medium says Derrick.
"1.20 versus the dollar is fair value and there is a chance we could go lower" If he is right then there is a lot of easy money to be made trading the euro lower on Greece's death spiral.