NEW YORK (CNNMoney.com) -- The outlook for Greece remained cloudy Monday even as the nation moved to activate a $53 billion emergency aid package.
"The timing of the dispersal of funds is still up in the air," said Nick Stamenkovic, fixed income strategist in Edinburgh at RIA Capital Markets Ltd.
A key measure of Greek debt -- the spread between the Greek 10-year note and Germany's 10-year bund -- widened by a record of more than 6 percentage points early Monday.
The widening spread is worrisome as investors look to Germany's bunds as a benchmark measure for other European bonds.
"Investors remain nervous that if this funding isn't forthcoming, Greece won't be able to meet its funding needs in time and will be forced into some kind of restructuring," said Stamenkovic.
On Friday, Greek officials formally requested up to $53 billion in combined loans from the European Union and International Monetary Fund. The country faces a May 19 deadline for refinancing about $11.4 billion in borrowings.
Concerns about Greece have plagued the markets for the last few months as investors worry that a default there could have a ripple effect on other strapped European countries and kill the chance of a global economic recovery.
German Chancellor Angela Merkel told reporters Monday that Greece must accept "tough measures" before Europe's largest economy will provide additional financial support.
"The Germans have made it quite clear that they will not provide aid unless Greece shows that it will take steps to ensure that this problem will not happen again," said Stamenkovic.
Last week, Moody's cut its bond rating for Greece one notch, to an A3 level, citing "significant risk." A3 is still considered investment grade, although it's not an entirely high-quality credit level. The ratings agency cautioned that further downgrades are possible as it continues to review Greece's economic outlook.
Carl Weinberg, chief economist at High Frequency Economics, said that the emergency funding from the EU and IMF will only provide temporary relief and that a "mandatory multiyear restructuring agreement" is the best way for Greece to get its fiscal house in order.
"Unless a solution to the market's uncertainty about Greece's long-term creditworthiness can be found and implemented between now and then, the government will be back in Brussels and Washington begging for more bridge financing," Weinberg wrote in a research note.
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