"Countries facing sovereign debt crises typically bring down their costs and jumpstart their competitiveness by devaluing their currencies. This option is not available to the countries tethered to the euro, meaning that the members of the euro zone that must restructure likely face a lost decade of wages instead."
"Greece and Italy, with debt in excess of 100 percent of GDP, are at risk of falling into an austerity trap. Belgium may also be in trouble, with debt at 96.2 percent of GDP, which is above the 90 percent threshold suggested by Carmen Reinhart and Kenneth Rogoff in the empirical study “This Time it’s Different” as the point at which risk of a sovereign debt crisis escalates. While the private debt problems in Portugal and the banking problem in Ireland are substantial, they are more easily solvable than those facing Spain."