Outlook Round one to Greece. It has taken three separate announcements of austerity measures, but Athens at last managed to get its €5bn bond issue away yesterday – indeed, it was over-subscribed. That suggests even the most indebted countries can, if they work hard enough to convince the markets of their sincerity in promising to reduce borrowing, find a way to overcome doubts about sovereign debt.

Still, convincing the markets is only the first step – governments also have to take their people with them. Greece has already endured one national strike and a bout of civil unrest, and yesterday it was Portugal's turn. Thousands of its public sector workers staged a one-day stoppage in protest at a wage freeze and other Government austerity measures.

Similar actions have been going on across Europe and will, in time, affect economic output. Borrowing may come down, but so will GDP, which would mean less progress than expected on the ratio of the former to the latter.

The biggest test that all of Europe's most indebted nations now face – and this includes the UK – is whether they can persuade people to swallow the medicine that the markets want them to be force-fed.