The mishandling by EU finance ministers of the Greek debt crisis may likely have a lot to do with the strains facing Angela Merkel's ruling coalition ahead of a key German state election early next month. But whatever the reason for the dithering, the agreement to let Athens tap, at a time of its choosing, €45bn in emergency funding has woefully failed to steady the nerves of the sovereign bond markets. Last Friday, the annual cost for Athens to borrow money for 10 years rose back up above 7.3% – a level last reached before the EU agreed the funding line.

It seems the markets will soon test whether €45bn is anything like enough to cover Greece for the next few months when it needs to raise tens of billions and refinance existing debt.

The uncertainty hit Ireland too. Ireland was only one of three European countries, including Greece and Portugal, to see its key interest rates rise last week, albeit by a modest three basis points to 4.5%. Worryingly, EU policymakers are saying aloud what the debt markets fear – that the cycle of austerity and declining tax revenue will make it impossible for Greece to stop its debt pile – already well over 100% of GDP – from rising again.

"I am particularly concerned about the dramatic deterioration in public finances," the European Central Bank's Juergen Stark last week said on Greek tax revenues.

Expect the markets to pay more attention to the monthly exchequer figures from the likes of less indebted states, such as Ireland, looking for signs that tax revenues will stop falling here.