The European emergency rescue package is impressive in scale, but fails to address three key questions, according to Simon Derrick, chief currency strategist at Bank of New York Mellon, Monday.
The first is practicality and how these funds are going to be approved, Derrick said.
"This is no small matter," he said. "If approval demands that the proposals are dragged over the coals of member state judicial scrutiny, then it is unclear how they will fare in Germany given that the government has just lost its majority in the upper house thanks to defeat in Sunday’s North Rhine-Westphalia election."
That defeat was in part due to the bailout of Greece and Germany is now facing a far bigger bill for the stabilization fund, Derrick said.
Second, there is the European Central Bank balance sheet. After telling the market only last Thursday that it was not even discussing buying bonds, the market crisis has forced a massive u-turn by the central bank.