HUNTSVILLE, Alabama (Reuters) - Investors face an important question: sell euro zone assets because of doubts about the Greece bailout or sell them because the rescue is just the beginning.

That's right, even if the package works on its own terms, and who knows maybe it will, the currency zone still faces years of internal tensions and plenty of opportunities for default or fracture, much less garden variety political upheaval. All of which argues for continued pressure on the common currency and a growing risk discount on euro zone financial assets.

Greece and the euro enjoyed a brief and none too passionate honeymoon after European governments on Sunday agreed a mechanism for up to 30 billion euros of emergency loans to Greece, with 12-month Greek yields plunging by more than a third and a smaller but still profound fall in the cost to insure it against default.

By mid-week, markets were having second thoughts, sending default insurance premiums to $435,000 per $10 million insured from $359,000 on Monday and $426,000 on Friday. It could have been the strikes in Athens. It could have been a warning from ratings agency Moody's that Greece must not put a foot wrong or it faces further downgrades. It might even be the realization that there was widespread political uncertainty about how, when and by whom the deal would be approved.

It is just mind-achingly difficult to gain consensus for these sorts of extraordinary actions in a currency zone without a clear political process to match. Perhaps it is a sign that it is well crafted, but the deal seems unpopular both with people in Greece, who face austerity as wages contract or productivity explodes to regain competitiveness, and elsewhere in Europe, where the costs will be high. UBS estimates that the 15 euro zone states will pay an average of 0.35 percent of their combined GDP for the deal, with no assurance that it will prove to be enough, nor that Greece will be the last euro zone state to need this kind of help.

Add into this that many euro zone states face their own struggles to hit Stability Programme targets and you have an unhappy mix.

Arguably, the best reason to sell the euro and buy Greek default insurance at mid-week didn't even come out of Greece. The European Commission on Wednesday warned Portugal that weak economic growth and tax revenues may mean it has to make additional fiscal cuts to control its own fat budget deficit, news that sent Portugal's default insurance premium up by 12 percent in a single day.

To be sure, the Greek support package could make a difference, giving the country time to sort out its finances and, probably closer to the truth, giving it the chance of being rescued by a strong global economic upturn. This possibility is more than overbalanced by difficulties faced by the rest of the so-called PIIGS (Portugal, Italy, Ireland, Greece and Spain) all of whom face similar issues with high budget deficits and an inability to compete on even terms with Germany. Combined these have labor costs that exceed Germany's by 20 percent or more, and with a single currency they have no way to quickly devalue themselves to competitiveness.

To regain that competitiveness wage growth will be lousy, if it grows at all, and you can expect tremendous infighting within Europe for how the pain gets shared. If the market imposes higher interest rates, the task becomes that much more difficult.

Even if markets somehow become comfortable with these risks, it argues for a European Central Bank which stays loose longer, potentially undermining the euro. Amazingly Poland intervened to drive its zloty down against the euro last week for the first time ever, a very revealing sign of who exactly is seen as weak and who strong.

A weak euro might argue for selective strength in some European equities, but then again a weak euro amid political divisions, mass protests and consumer woes probably indicates a fat risk margin on shares.

There is also a sort of horrible interconnectedness of the PIIGS, the rest of Europe and their banking systems. While Greece alone might be manageable, Societe Generale estimates that Europe as a whole has bank lending to the PIIGS equal to 19 percent of GDP. France has aggregate bank lending to Italy equal to 18.5 percent of GDP.

The lesson from the US bailout of its banks is that success, defined as stopping a bank run, can be won, but there must be clarity about who is being bailed out, who will foot the bill and that they can come up with the cash. It also helped that it was not at the time put to a popular vote.

While the US tried to deal with its banks sequentially, it failed.

Europe, which can't define who will be helped and when or by whom, faces a more daunting task.