If you think of the European debt crisis in terms of taverns (banks), drunks (governments), and a distillery (the European Central Bank), you will begin to understand the reasons why it is getting worse.
The governments are like drunks who have run up large tabs as the local tavern. Some drunks have huge tabs: the PIIGS. They cannot possibly pay them off. But the tavern owners still have hopes that the drunks will at least make token payments, plus keep drinking.
The drunks want a steady flow of the good stuff: money. The central bank used to supply this. Now it has stopped. The drunks’ heads are splitting. They need a drink or two just to steady their hands.
If you want to see what is coming, think of a tavern filled with drunks who are taken to the de-tox center. How much can you expect from them?
I explain it here.