The bailout has saved Europe, for now, but it's unlikely to save Greece.
The euro 130 billion ($172 billion) rescue - agreed to on Tuesday after an all-night summit of European ministers - prevented an uncontrolled bankrupcty and calmed investors that a Greek default would have started a chain reaction across Europe.
But it left key problems unresolved.
Draconian budget cuts could keep Greece mired in recession after five straight years. The deal doesn't directly address the debt problems in other struggling countries in the 17-country zone that uses the euro. Spending cuts could reduce tax revenue and possibly worsen the government's finances.
"You can't shrink your way out of a recession," said Mark Weisbrot, co-director of the liberal Center for Economic and Policy Research in Washington. "What they are doing to Greece really makes no economic sense."
In Athens, Greeks reacted with a mixture of relief and fear of a dark future.
"I don't see it with any joy because again we're being burdened with loans, loans, loans, with no end in sight," architect Valia Rokou said in the Greek capital.
Finance Minister Evangelos Venizelos said the agreement managed to prevent imminent catastrophe: "We avoided the nightmare scenario," he said.
The agreement was the second massive bailout of Greece following a euro 110 billion ($146 billion) rescue in 2010 that didn't return the country to solvency. It will give Greece euro 130 billion in loans through 2014 from other eurozone governments and the International Monetary Fund.
It was secured after Greece agreed to painful and humiliating measures, including thousands of layoffs of civil service workers and cuts to the minimum wage, imposed by countries suspicious of Greece's reform efforts after two years of what they called the country's broken promises.
The finance ministers wrangled until the early morning over the details of the rescue, squeezing last-minute concessions out of private holders of Greek debt who agreed to lose 53.5 per cent of the face value of their investment to avoid even more severe losses if Greece fails to pay euro 14.5 billion in debt due March 20.
The serious risks of the bailout's failure include the likelihood that Greece's economy remains in a deep recession instead of returning to growth in 2013 as the deal assumes. That would undermine chances of paying even the reduced debt load, estimated at a still-high 120 per cent of annual economic output in 2020, down from 160 per cent now.
Additionally, political outrage over the cutbacks could lead Greece politicians to balk at the tough conditions. That could push rescuer countries - led by Germany - to cut off further funding.
Elections in Greece are expected in April. The leaders of the two main parties have committed to the cuts and reform program, but anti-bailout parties have been gaining in the polls.
Greece's economy shrank 7 per cent in the fourth quarter of last year and unemployment is 19 per cent, a consequence of cuts in public wages and increased taxes inflicted during a downturn.
If that keeps up, even the rescuers acknowledge the reduction goal of 120 per cent of GDP is long gone.
Including Greece's first bailout worth euro 110 billion the new deal means every Greek man, woman and child will owe the eurozone and the IMF about euro 22,000 ($29,000).
Greece agreed to cut spending and wages, and to permit outsiders to supervise its finances through European Union and IMF officials stationed in Greece. The rescuers also demanded a separate account for the aid money and legal guarantees that creditors get paid before teachers, doctors and police do.
The agreement assumes that banks and investors owed money by Greece will take new bonds that reduce their holdings by more than half.
Even if it later balks at the bailout conditions, Greece would have difficulty writing down the new debt it issued to private bondholders, who demanded stronger legal protections. Official creditors - the IMF, the eurozone countries and the European Central Bank - would also have difficulty accepting more writedowns.
Inability to pay - or unwillingness to accept the harsh conditions - could lead to a non-negotiated "hard" default that could end in Greece leaving the euro.