Debt roulette: Is Portugal next?

    Both countries, though, are suffering from Germany's and the euro-zone's indecisiveness which has roiled financial markets. "Investors are scared that if Spain and Portugal get into trouble, no help will materialize," says Reis. "It's the equivalent of the U.S. federal government giving out a stimulus and saying, 'We won't help California, or, then again, maybe we will.'"

A fix that may be too big

    In the end, even if there is the political will to solve the problem, the amount of money that would be needed to prevent defaults in all of three of Europe's weaker southern tier economies might just be too huge.

    "What will it take to bail out these countries -- a plausible number that's been bandied about is 600 billion euros," says IHS Global Insight's Behravesh. "The EU has had a hard enough time coming up with 45 billion, let alone 600. The EU has to make it clear that it has a plan, a big plan."

    And that big plan has to be put into place fast, because Spain's troubles loom, and they are more challenging than what's facing Greece or Portugal. Unemployment hovers at 20% and the country is reeling from a housing bubble that burst last year that sent indebtedness in both the private and public sector soaring.

    This year alone, Spain must meet a debt obligation of 225 billion euro -- the equivalent of Greece's entire economy. "Spain is the biggie," says Behravesh. "It's got everybody's attention." As it should, if Spain catches the default virus, it has the potential to become too big to fail, but too sick to cure.