The victory of parties willing to implement the bailout deal provided some much needed relief on the risk of Greece exiting the euro.
But with the Greeks likely to push for relaxation of the bailout terms, too much compromise from the eurozone risks its credibility and sparking contagion by encouraging other demands for leniency on painful reforms.
Moreover high bond yields show markets are skeptical Italy will avoid a euro-busting bailout, showing European leaders have a huge task cut out for them when they meet next week.
So far markets have reacted positively to the election results. At 6.30am AEST today, the local unit was trading at 101.15 US cents, up from 100.16 cents on Friday.
But whether that spike lasts will depend on how Europe plans to fix the crisis long term.
European leaders face difficult decisions in the days ahead on managing the outcome of the Greek election, upholding their credibility on financial discipline to avoid stoking contagion, and making convincing progress towards a grand plan for deeper integration
"We are now in a defining moment for European integration,"
European Commission chief Jose Manuel Barroso warned last week. "Without confidence (on markets) in the irreversibility of economic and monetary union, our prospects are limited."
All attempts so far to end the eurozone debt crisis have failed, analysts say
, forcing EU leaders towards a new and uncertain dimension of deeper integration which holds both promises and dangers.
Bailouts "just going to delay the inevitable".
Their efforts so far haven't stopped the crisis.
Eleventh hour bailouts of Greece, Portugal, Ireland and now Spanish banks
, all born of panic on the financial markets, in each instance only bought time, before uncertainty quickly returned
The rescue of Spain's banks, which was supposed to ease borrowing costs to levels Madrid can afford, almost immediately fell flat and, analysts say, may prove to be the last straw for business as usual in the eurozone.
The bailout "is just going to delay the inevitable"
, said Ben Taylor, a sales trader at CMC Markets, as adding the cost of rescue loans to Spain's banks onto the country's debt will only precipitate a full Spanish bailout.
The prospect of bailing out the eurozone's fourth largest country may finally push Europe across the Rubicon