Is exuberance over the Greece deal justified?

Investors are jumping for joy, European officialdom are patting themselves on the back and the world is generally breathing a sigh of relief at an eleventh-hour breakthrough in Greece's debt talks that looks likely -- for now -- to keep the embattled country in the eurozone.

Time to get back in the water? Not quite.

Although European Union President Donald Tusk hailed the deal as one that would help Greece "avoid disaster," it's hard to see what the proposed bailout will do to set Greece on the road to economic recovery. After all, the goal here is not only to avoid disaster -- that ship sailed long ago in Greece, where GDP has shrunk by 25 percent since 2009 -- but to repair the damage.

The eurogroup's plan dollops out the same kind of austerity that has pummeled Greece into submission over the last five years. The proposed pact to free up a third bailout worth up to 86 billion euros ($95.8 billion). looks akin to another geopolitical payday loan that keeps the borrower tethered to an unmodified debt load that even the International Monetary Fund concedes is unsustainable.

Brussels wants pensions that have already been cut to be cut more. It wants to see the shrinkage of the public sector work force in a country with already depression-levels of adult and youth unemployment, all secured by an unprecedented surrender of $50 billion in publicly owned Greek assets controlled by the eurozone.

Meanwhile, conditions on the ground in Greece continue to deteriorate as banks remained closed on Monday. After several years of economic austerity, both Greece's poverty and suicide rates have spiked. General unemployment is close to 25 percent while the youth joblessness rate is around 50 percent.

And Greece has other problems. Last week the United Nations warned that Greece and its Balkan neighbors are in danger of being overwhelmed by tens of thousands of refugees that have fled Syria and other Middle Eastern hot-spots. The UN said that more than 77,100 refugees had come to Greece since January.

"[O]ur first reaction is that this will merely delay the inevitable," said Jonathan Loynes, chief European economist with Capital Economics, in a note analyzing the bailout. "With the crisis having done enormous damage to the Greek economy and financial system in recent months, it is impossible to imagine that conditions will now return to anything like normal.... unless the new deal includes a substantial restructuring of Greek debt -- which is unlikely -- Greece's future inside the eurozone remains under huge doubt."

Other hot-spots

With disaster in Greece postponed, if not averted, Federal Reserve Chair Janet Yellen is likely to be asked where global financial markets go from here in her semi-annual report to Congress on monetary policy on Wednesday and Thursday. Chances are the ability of the markets to re-group, at least superficially, will be cited as a sign of resiliency that should insure the Fed stays on track to raise interest rates later this year.

In comments in Cleveland on Friday, Yellen did raise concerns about the lagging U.S. labor force participation rate, which is at its lowest rate since the 1970s. But like the prolonged misery of the Greek people, the inability of the U.S. economy to deliver a broad-based prosperity has become a kind of background noise to the markets.

Eyes this week will also be firmly glued to China's stock market, which has rebounded in recent days after losing some 30 percent of its value since June. Overnight, China's robust export number for June helped boost confidence as hundreds of stocks that had been suspended were being traded once again.

China's central economic planners will be on guard for possible unintended consequences of putting an entire stock market into a cryonic state to avoid it flat-lining. Freezing the body is the easier part of that process. It's bringing the body up to room temperature that's really tricky.