Relief that Greeks had given victory to pro-austerity conservatives was short-lived today as traders fretted that Greece's problems remained huge and that the real issue was Spain.

In a quick turn around, dealers in Europe swiftly ended a relief rally that began in Asia, taking little comfort in the likelihood that a pro-bailout coalition would govern Greece with analysts warning that the country had just "returned where it was before".

Yoshikiyo Shimamine, economist at Dai-ichi Life Research Institute, told AFP: "They are back to the difficult path they had been taking before. I pay respects to the Greek people who chose this road, but it will be a painful, tough road."

Erik F. Nielsen, Global Chief Economist at Unibank acknowledged relief that "a further lapse into the unknown was avoided yesterday" but added that "there is much to be done."

The second election came at a painful price Nielsen said, since the past six weeks "have seen an already very weak economy grind to a halt."

He said that before the first round of elections, that ended indecisively forcing Sunday's re-vote, "there was a hope that the rapid formation of a new government would slowly but surely help to address" Greece's urgent issues.

But instead "since then the economy has taken another leg downwards," the economist said.

For Philippe Waechter, researcher at Natixis Asset Management, Greece's European partners must now open talks to discuss Greece's debt exposure "as soon as possible" in order to make Greece's commitments "sustainable in the medium term."

Germany, the eurozone's de facto paymaster, said late Sunday that it is ready to discuss giving Greece more time to attain the objectives under its 130-billion-euro ($165 billion) EU-IMF bailout agreement but there could not be substantial changes in engagements undertaken.

The International Monetary Fund indicated it will engage with the new government in Athens "to help Greece achieve its objective of restoring financial stability, economic growth and jobs."

Before markets turned lower, Kenichi Hirano, operating officer at Tachibana Securities, told Dow Jones Newswires that the election results were "a net buy incentive for stocks" but added that "Greece's problems are far from over."

Paul Mackel, head of Asian currency research at HSBC in Hong Kong, said: "There is still some room for disappointment to come in. This is a small bright spot and it could fade briefly."

Whatever rally there was in Asia was cut short in Europe after Spain indicated that doubtful loans at its teetering banks had hit a record high of 8.72 percent in April.

Spain's EU partners last week promised Spanish banks up to 100 billion euros in rescue loans and the new data raised the likelihood that the help promised would be too little too late.

That prospect sent the price Spain must pay to borrow for 10 years to a record above 7.0 percent in morning trading after it had initially dipped in response to the Greek election.

"First thing, the rates were helped by the results in Greece, which could have been more unclear," said bond strategist at BNP Paribas, Patrick Jacq.

However, Jacq said: "The fundamental situation remains the same. The Spanish bond market continues to get worse, in terms of the yields, of the spread (with German rates) and the lack of liquidity."