Finland and the Netherlands cast the first doubts on a European summit deal designed to save Spain and Italy from being engulfed by the currency bloc's debt crisis.
The Finnish government said that Helsinki and its Dutch allies would block the euro zone's permanent bailout fund buying bonds in secondary markets.
This is despite an agreement among leaders' last Friday that the fund could be activated to stabilise markets.
Several previous market rallies after euro zone crisis agreements have fizzled within a day or two as investors have fretted about the lack of detail, the risk of delay and national vetoes, or the inadequate size of the rescue funds available.
The 17 euro zone leaders agreed in Brussels on steps to shore up their monetary union and bring down borrowing costs for Spain and Italy, regarded as too big to fail but also too expensive to rescue if they are shut out of markets.
They gave few details on the use of the temporary EFSF and permanent ESM rescue funds. ESM bond buying in secondary markets would require unanimity and that seems unlikely because Finland and the Netherlands are against it, the Finnish government said a report to a parliamentary committee.
Finland's Prime Minister Jyrki Katainen's spokesman said the ESM stance had nothing to do with others blocking Finland's proposal. Helsinki simply did not consider secondary market purchases an effective way to counter the crisis, he told Reuters.
Dutch Finance Ministry spokesman Niels Redeker said the Netherlands did not support using the bailout fund to buy bonds on the secondary market and would evaluate purchases case-by-case. Dutch Prime Minister Mark Rutte said last Friday he was "not a big fan of purchasing bonds with the existing instruments because it is costly," Redeker said.
EU officials said the leaders had agreed in principle that the rescue funds would be empowered to buy bonds both at auction when they are first issued, and on the open market, if a government makes a request and signs a memorandum of understanding on macroeconomic conditions.
A European Commission spokesman also insisted that no changes to the treaty governing the ESM were required to enable the fund to recapitalise banks directly. He was responding to doubts raised in the Netherlands by legal experts who said the treaty would have to be amended and ratified again.
The Commission's spokesman on economic and monetary affairs said articles 14-18 of the treaty set out the instruments the European Stability Mechanism (ESM) has at its disposal to maintain financial stability in the euro area.
Sources close to European Council President Herman Van Rompuy, who chaired last week's summit, said the leaders had taken great care to avoid any decision that would require ratification because of bitter past experience.
A deal to expand the scope and effective lending capacity of the temporary European Financial Stability Facility (EFSF) last July exacerbated bond market turmoil after a brief rally when it became clear it would take months to ratify.
Finland threw a spanner in the works by demanding collateral on its share of EFSF loans to Greece, requiring months of tricky negotiation, and Slovakia's coalition government fell apart over the EFSF deal, delaying ratification until mid-October.
Other factors that have spooked investors include the risk of Germany's powerful constitutional court delaying the entry into force of the ESM and possibly placing restrictions on its scope of action, and the fact that the Brussels summit did not increase the overall size of the rescue funds.
Some investors may calculate that the sums available to support Spain and Italy in the bond market are too small to bring their borrowing costs down in a sustained way. The European Central Bank spent some €210 billion in the last two years to buy Greek, Irish, Portuguese, Spanish and Italian bonds without achieving any lasting improvement.
ECB's Asmussen urges Greeks to get behind reform
The new government in Greece must put the country's bailout programme back on track and Greeks must back reforms to ensure they succeed.
This is according to ECB executive board member Joerg Asmussen.
Although important reforms had been implemented, "many other necessary reforms have not been followed through due to weak programme ownership," Asmussen told a conference in Athens.
"The programme is the best option for Greece," he said, referring to the raft of austerity measures agreed by Athens in return for two rounds of rescue loans and a public debt write-off that have kept the country afloat.
The programme is helping Greece's standard of living, he said and the new government "should not waste time" avoiding or loosening it. "Delaying adjustment is risky," he said, and would increase the debt-to-ratio GDP above the 120% by 2020 targeted as part of the rescue programme.
Adjustment "is also not free", he stressed and would require additional funding from creditor countries.
Asmussen argued that the difficulties Greece was facing "do not stem from the programme." "They stem from many years of unsustainable economic policies and a reluctance to implement the necessary reforms," he said.
''With or without the programme, any Greek government would have to pursue a similar adjustment to bring the economy back on track and restore the confidence of financial markets,'' he added.
Compared to the situation if Greece had chosen to tackle its problems alone, "the programme is actually helping support the Greek people's standard of living," Asmussen said.
Asmussen spoke just ahead of a visit by auditors from the European Union, International Monetary Fund and ECB who will review Greece's implementation of the reform programme.
