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Last Friday, the euro was able to dodge catastrophic losses when EU officials gave their go signal on Greece’s second bailout package following the deadline of the country’s bond swap program.

So what if International Swaps and Derivatives Association (ISDA) has declared a credit event and credit rating agencies have decreed Greece in default? The country will still be able to pay its debts for now, right?

The problem with EU officials kicking the can down the road is that it has set a precedent for other European countries.

For instance, financially troubled economies can now expect a bailout, provided that appropriate austerity measures are taken.

In addition, governments can now easily activate their collective action clauses (CACs) when there is a risk of default.

Who are the next likely candidates for a Greek-style debt crisis? Let’s take a look at the top candidate and the runners-up.

Prime Candidate: Portugal

It seems that investors are realizing that Portugal is marching on the same road as Greece. Estimates from the International Monetary Fund (IMF) suggest that for Portugal to keep its debt stable, it must be able to run a primary budget surplus of around 2% of its GDP – a major objective that has only been achieved three times in the last 17 years.

Portugal’s economic growth rate isn’t helping either. The economy continued to contract in the last three months of 2011, showing a 2.8% decline in GDP against expectations of only a 2.0% decrease. This dragged Portugal’s 2011 GDP to -1.6% after showing a 1.4% growth in 2010.

Market geeks are saying that Portugal needs a healthy export industry in order to offset the impact of higher taxes and spending cuts on growth. But with Spain (Portugal’s largest export market) having its own growth problems, analysts aren’t holding their breaths.

This is probably one of the reasons why Portugal’s 10-year bonds were trading at a 47% discount value last Friday.

Runners-up: Spain and Ireland

Spain’s government has a problem of spending beyond its means. This has caused the country to run a huge budget deficit of 8.5% of its GDP, much higher than the European Commission’s expected deficit of 6.0% of GDP. While technically not a debt concern yet, it could be an issue in the future once the government starts running out of money.

Meanwhile, Ireland also needs a bit of debt leeway. Remember that a little over a year ago, the Irish central bank took out a 30 billion EUR loan from the European Central Bank (ECB) to bail out one of its biggest commercial banks.

This means that for each of the next FIFTEEN years, the Irish central bank must pay 3 billion EUR to service its debt!

The Greek bailout may have boosted sentiment, but it probably won’t last. We saw this last Friday when risk aversion hit not only the euro but on other European currencies as well.

The fact is, the fundamentals haven’t really changed and the debt situation in the euro zone, save for the Greek bailout, is still the same.