How can the Greek debt crisis spread to other European countries?

Explain the process plz|||To start with most of Greek debt is held by European banks. 50% by French and German banks





If Greece defaults payments those banks will lose their money and hence they may need their own government assistance in order to avoid collapsing. This essentially means more bonds (i.e debt) issued by France %26amp; Germany.





The mistrust in the markets will also push the spread of other heavily in debt economies (Italy , Ireland ,Spain, Portugal , UK) into record heights, therefore making borrowing money extremely difficult for them. The same process (i.e bail out) will be needed for them but then again the healthier economies of Germany and France are not in position to carry all this burden...|||yes it can. that's why they are trying to prevent it.





mechanism is that people who invested into Greece also invested into other second-grade EU countries (Spain, Portugal, Italy), and will dump their investments if Greece is allowed to fail, b/c that would mean that other countries would be allowed to fail as well.|||Because other countries are in the same debt position as Greece. Borrowers are going to realize that they won't repay their debt either.