Other European nations are frequently mentioned as next in line for financial trouble. Their names have resulted in the acronym PIIGS, for Portugal, Ireland, Italy, Greece, and Spain.
Greece's debt load is the worst, but the other nations have also seen a big rise in interest rates. And the sovereign debt worries don't stop there.
For any indebted nation, solvency generally depends on the ability to refinance or roll over that debt in credit markets. If the cost of refinancing rises significantly, the debt burden can become hard to sustain.
Investors began showing heightened concern in 2011 about Italy, which has the next highest debt burden in the eurozone after Greece. In most European nations, sovereign debt doesn't exceed the size of one year's gross domestic product. But the worry about Italy (debt at about 120 percent of GDP) "can be repeated for more nations," economists Peter Boone and Simon Johnson write in an analysis of the eurozone crisis for the Peterson Institute for International Economics in Washington.
"How safe is Spain," they ask, "given the lack of clarity regarding the fiscal solvency of its banking sector and growth prospects? How safe is Belgium given its high debt levels and weak political system? The French debt burden is substantial, and France is arguably slow to gets its deficit under control, so what premium should France pay?"
Looking only at current debt-to-GDP ratios understates the challenge ahead for developed nations (including the US and Japan as well as European countries), says another report, by global economists at the investment firm Morgan Stanley. That's because current government policies (such as on pensions and health care) and demographics are challenges that loom but don't show up yet on the official balance sheet.
