The Potent EU Package - A Safety Net

What I think is one of the most important points of the recent package, below quotes from a Barclays Capital report:

[...]what markets feared before last weekend and why the large, initial EUR110bn bailout package for Greece had not addressed those fears. Bond yields actually rose on news of the initial bailout for Greece, including yields on the other  countries considered vulnerable (Portugal, Spain, Ireland and Italy).[...]

[...]

c) Greece’s bailout package made markets look even closer at Portugal, Spain, Ireland and Italy, and they concluded that those countries would need similar bailout packages.

With regard to concern c), the EU’s mega package provided perhaps the most potent answer. As we calculate below, the EUR750bn more or less matches the combined gross financing needs of Greece, Portugal, Ireland and Spain for three full years. Therefore, it would allow for the replication of Greek-like packages, allowing these countries, in principle, to remain out of the market for two to three years. This would seem to substantially reduce the immediate threat of financing crises. [...]

That said, it seems as though people now waiting for an escalation of the crisis could have to wait quite a while. That in turn should lead to nervousness about the short term plausibility of shorts in banks and in general. Therefore the market could start ticking higher if global growth news keeps coming in on a positive note...?

They go on to write however:

This weekend’s news did not alter the challenges that provided the initial reason for this report – namely, the massive fiscal adjustments needed (in particularly in face of reduced growth prospects and very elevated REERs) to successfully turn around these countries’ adverse debt dynamics. The aggressive EUR750bn support package and the ECB policy actions announced last weekend can go a long way in addressing the financing and liquidity-related issues, thus lowering the risk of self-fulfilling dynamics, but it did not ease the task of successfully turning around debt dynamics. Going forward, we think this is likely to shift the market’s attention to the actual implementation of announced fiscal measures and also to the growth performance. In response to them If these developments on the implementation and growth fronts surprise on the downside, the strongly positive market reaction to the EU’s mega package may not last.

But if this graph stays the way it is, i.e. flatlined on low levels I think we really could see a rally in equities....