At a meeting of G7 leaders this weekend, European ministers promised to keep pressure on Greece's government and make sure that country's debt problems won't spread and create larger financial problems around the continent.  Simon Johnson, for one, is not calmed, and thinks that European leaders are "not being careful," and that the stronger eurozone nations--France, Germany--need to do more to fight off serious financial crisis.  Here's Johnson writing at The Baseline Scenario:

The IMF cannot help in any meaningful way.  And the stronger EU countries are not willing to help – in part because they want to be tough, but also because they do not have effective mechanisms for providing assistance-with-strings.  Unconditional bailouts are simple – just send a check.  Structuring a rescue package that will garner support among the German electorate – whose current and future taxes will be on the line – is considerably more complicated.

The financial markets know all this and last week sharpened their swords.  As we move into this week, expect more selling pressure across a wide range of European assets. 

As this pressure mounts, we’ll see cracks appear also in the private sector.  Significant banks and large hedge funds have been selling insurance against default by European sovereigns.  As countries lose creditworthiness – and, under sufficient pressure, very few government credit ratings will hold up – these financial institutions will need to come up with cash to post increasing amounts of collateral against their derivative obligations (yes, the same credit default swaps that triggered the collapse last time).

Read Europe Risks Another Global Depression here.