NEW YORK (

TheStreet

) -- Europe's grand plan was good enough to get the markets riled up on Thursday, but economists aren't convinced the region's troubles are even close to over.

When investors woke up Thursday to headlines that Europe had forged a deal to stem its debt crisis, the euro was already soaring and European stocks were euphoric. Whether it was bears covering their shorts, or more bulls getting in, the U.S. market jumped as well.

Lawmakers across the pond essentially hit three buttons -- a bank recapitalization plan, a write-down on Greek debt, and a bigger emergency rescue fund. But for the most part, details remain sparse. The question at the heart of Europe's debt trouble remains who exactly should be responsible for the losses on debt stemming from the crisis? Since we still can't answer this question, we can't pinpoint who should cough up money and how much.

Sorting out the above is critical as lawmakers work out how to fire up powers of the European Financial Stability Facility to about $1.4 trillion. The current arrangement says the emergency fund will insure against losses on sovereign debt and contribute to "Special Purpose Investment Vehicles" with the help of private investors and possibly foreign players like China. But, there's no clarity on how much leverage these vehicles would provide.

An agreement on the 50% haircut for private holders of Greek debt was about the only new component. The idea is that the writedown won't trigger credit-default swaps because it is voluntary. But, as economists noted, no one unless forced would want to see the value of their assets fold in half.

Here are some loopholes brought up by critics of the deal:

The agreement says that Greek debt will be reduced to 120% of its GDP in 2020. Stanley Crouch, CIO of Aegis Capital, writes: "First, what are the 'projections' for Greek GDP in nine years? Second, who did the numbers? Third, all the 'projections' for Greece have been wrong in the past few months."

Capital Economics equates the latest plan to a "peashooter" rather than a "bazooka." The research firm isn't convinced that the bank recap plan can stabilize the financial sector. The expectation that banks inject an additional 106 billion euros into their core capital pool is not enough if debt in Italy and Spain were to default, says the research firm. "They make no allowance for the erosion of capital ratios likely to result from general economic weakness." Furthermore, the banks must raise the funds themselves with the government only acting as a backstop.

If banks need money to increase their capital base, they will likely have to cut down on loans to the private sector. If governments need money to backup the banks, they will likely cut down future investment and current spending. By both routes, the costs trickle down to the consumers, leading to even slower economic growth in Europe.

High Frequency Economics estimates that the plan siphons off 1.3 trillion euros that would have been put towards investing and spending. That means over the period that the eurozone takes to raise the money, economic growth will suffer by 13.8%.

Markets have been jerked up and down by Europe's debt difficulties. Investors may have had enough. But the so called "comprehensive plan" is unlikely to be the end of the region's debt drama. European leaders gear up for even another summit in early November, this one being a meeting of G-20 nations. Investors should be advised to tune in to more debt talk ad nauseam.

-- Written by Chao Deng in New York.

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