The scary thing about debt crises is that, like early winter colds, they come out of nowhere and they're contagious as hell. One day, the markets trust a country like Greece to pay back its loans. The next day, the same investors look at country's vital stats -- high annual deficit; high debt load; falling exports -- and start to panic. Interest rates spike. Investors both create and react to the panic by running away from any country with similar vitals. Rising fear spreads, interest spreads rise, and before you know it: contagion.

That's what a widespread debt crisis looks like. Now turn your attention to Europe:

To Ireland...

If mishandled, Ireland could all too easily become a sovereign version of Credit Anstalt - the Austrian bank that brought down the central European financial system in 1931, sent tremors through London and New York, and set off the second deeper phase of the Great Depression, the phase when politics turned ugly.

To Spain...

The focus would shift instantly to Spain, where economic growth stalled to zero in the third quarter, car sales fell 38pc in October, a 5pc cut in public wages has yet to bite, and roughly 1m unsold homes are still hanging over the property market. The problem is not the Spanish state as such: the Achilles Heel is corporate debt of 137pc of GDP, and the sums owed to foreign creditors that must be rolled over each quarter.

The risks are obvious. Unless core EMU countries raise fresh funds to boost the collateral of the rescue fund, markets will not believe that the EFSF has the firepower to stand behind Spain.

To Italy...

While Italy has kept a tight rein on spending, it is not in good health. Growth has stalled; industrial output fell 2.1pc in September; and the Berlusconi government is disintegrating. Four ministers are expected to resign on Monday.

It is clear by now that IMF-style austerity and debt-deflation is not a workable policy for the high-debt states of peripheral Europe, since it cannot be offset by the IMF cure of devaluation. The collapse of tax revenues has caused fiscal deficits to remain stubbornly high. The real debt burden has risen further.

It's not a pretty picture. Read the full story anyway at the Telegraph.