Investor doubts, a German legal threat and persistent confusion over the terms of aid perforated Greece's euro zone parachute Wednesday, pushing borrowing costs up.
The potential legal action by a German economist compounded ambiguity over how Athens and its euro peers would activate the package, sending Greek bond yields toward the euro-era record territory they hit before details of the deal were announced.
Analysts said they saw little risk the EU/IMF package would be blocked, which would threaten Greece's short-term liquidity ahead of a 8.5 billion euros ($11.6 billion) bond coming due in May, but said long-term doubts over Greece's solvency remained.
Greece's finance minister George Papaconstantinou said no country would block access to EU/IMF safety net if the European Commission and European Central Bank issue a positive recommendation that it should be used.
But German Chancellor Angela Merkel has appeared reluctant to help Athens ahead of a May 9 election as polls show voters there don't want to help a country that has flouted the bloc's budget rules for years.
Joachim Starbatty, a professor at Tuebingen University, was quoted by the Rheinische Post as saying the aid package was a subsidy that breached European Union rules because it offered loans at interest rates below the market rate for Greek bonds.
"We will file a suit at the Constitutional Court against the credit from euro states," Starbatty told the paper.
Starbatty, who had previously threatened to take legal action if Greece was given the aid, was not immediately available to comment.
Euro zone finance ministers have argued the deal is not a bailout as it comprises bilateral loans. But analysts said the challenge and other unanswered questions had clouded the picture over whether Greece could beat the crisis alone.
"The elections in Germany may make it a slightly trickier job to get the aid through," said Ben May, EMEA economist at Capital Economics. "Given what has been said, Greece should get the aid but the latest news muddies the waters a bit."
Euro zone finance leaders have said they can quickly deliver the funds if needed, although it was still unclear whether euro zone state parliaments must vote for each country to take part and whether the deal would provide enough for Greece to meet long-term borrowing needs of around 50 billion euros a year.
Germany's finance ministry said the 30 billion euro package was to cover a period of three years and talk of any other amount was "speculation," conflicting with previous reports that the amount was for the first year and more money was expected later.
The deal expects an additional 10-15 billion euros in International Monetary Fund cash but that agreement is still not ironed out.
The weekend fleshing out of the safety net's details bought Greece time Tuesday, boosting demand at auctions of short-term debt. But the high interest rates of nearly 5 percent for 1.56 billion euros in 6-month and 1-year papers, added to worries that rising debt costs will hit its budget outlook.
The Greek debt crisis has hit the common European currency and raised concern about contagion of other euro zone periphery countries facing fiscal problems.
But Portugal easily sold 2-year bonds, which usually carry a higher interest rate than shorter term T-bills, at 1.715 percent Wednesday.
Struggling to avoid becoming the first euro zone country to ask for outside help, Greece has stuck to a plan to borrow from markets rather than tap the aid.
At an estimated 40-45 billion euros in the first year, it would be the biggest multilateral bailout ever attempted.
Papaconstantinou said EU and ECB approval, which is part of the deal, would make it difficult for anyone to stop it.
"I have no doubt that if we ever come to the point to ask for help and the ECB and the European Commission deliver a positive recommendation, it will be very difficult for any country not to vote in favor," he told Greek television.
Papaconstantinou said officials would consider other factors besides debt costs when deciding whether to activate the mechanism or not. He added Athens would never reveal the "red line" at which it would decide to invoke the deal.
Kornelius Purps, a bond analyst at UniCredit, said it should take only a few days for Greece to submit a request and for euro zone leaders to get a green light from the Commission and ECB.
"If Greece needs funds from the market or from the EU, they will get it," he said. "Uncertainty going beyond this period is still there. This can and should only be resolved by Greece's long-term actions on its budget. It needs to take time."
Greek assets gave back gains won after the deal's announcement, with the premium investors demand to buy 10-year government bonds rather than euro zone benchmark German Bunds rising to 394 basis points, from 375 late Tuesday. (One basis point is equivalent to 0.01%, or one-hundredth of a percentage point.)
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