The resulting alarm among investors sent the yield on Greek bonds – the interest rate the government would have to pay to borrow in the open markets – back to record highs last week. It's as if the July rescue never happened – and it raises doubts about other elements of the emergency deal agreed at the time, including the new role of the European Financial Stability Facility (EFSF), which Sarkozy suggested was a fledgling European International Monetary Fund.

Changes to the EFSF need to be agreed by all member governments, and the squabble about collateral underlines the wide political divergences across the single currency zone.

The "voluntary" bond swap at the heart of the bailout also appeared to be in doubt this weekend, after Greece said it would pull out unless 90% of its creditors – mainly European banks – agreed to take part. Greek banks start reporting their results this week, and with government bonds making up much of their capital, they are expected to warn of losses of up to €5bn if the haircuts go ahead.

Greek banks have also suffered rapid declines in deposits in recent months, as consumers withdraw savings to spend, and wealthy Greeks squirrel away their assets in safe havens abroad.

This fresh outbreak of the jitters is happening against a sharp deterioration in the economic outlook right across the continent. Even in Germany, GDP growth has slowed to a crawl, and business confidence has plunged. The latest round of tax rises and spending cuts, with France, Spain and Italy all announcing new fiscal tightening since the beginning of August, are only likely to depress growth yet further.

In Greece, weaker growth could mean the fiscal sums no longer add up. Analysts are beginning to speculate that even after passing a highly contentious package of austerity measures in June, the government could miss its deficit reduction targets.

"There are signs that the Greek deficit is still not on track, despite the latest package that was agreed in July," said Julian Callow, of Barclays Capital. Athens' tax and spending plans are based on the assumption that the economy will contract by 4.5% this year. That is a catastrophic recession by any standard but it now looks too optimistic: Callow expects a contraction of 5.5%, perhaps even 6%.