Did Europe just save Greece with this bailout? Not yet, and probably never. ... If Europe can't save Greece, why is it trying? Don't buy this line of reason

Did Europe just save Greece with this bailout? Not yet, and probably never. ... If Europe can't save Greece, why is it trying? Don't buy this line of reasoning, Greece must be saved or all of Europe is in a for a very difficult period, economically. If the Greeks are allowed to give creditors a haircut, the first thing that any sane (if slightly rapacious) investor/trader (of which there are more than enough) should do is to start shorting the Italian and Spanish bonds, buying credit default swaps on them, and shorting the Euro. Once the seal is broken and one sovereign entity is allowed to default, it becomes obvious that a sustained speculative attack would drive interest rates high enough to force the larger Southern European economies into default as well. The whole thing would play out in a fashion similar to the exit of the British government from the European exchange rate mechanism in 1992 except that the scale is much larger and the global financial sector has more numerous and powerful tools at its disposal.