And now, it is Portugal's turn. Last Wednesday, the government in Lisbon was forced to resign when the opposition refused to back a tough economic package designed to tackle the country's fiscal crisis. The result is a political crisis on top of an economic mess, one that threatens — again — to spill over into the European Union. Portuguese and EU officials say the damage can be contained, but developments in Portugal suggest that the time has come for a new approach for dealing with economic crisis.

Portugal has long been one of western Europe's poorest countries. Even during the go-go years of the last decade, its economy struggled: Growth has been below 1.5 percent for all except three years and was negative in 2004 and 2009. Unfortunately, that anemic performance did not slow government outlays. As a result, the country ran up a budget deficit that reached 9.3 percent of its GDP in 2009. (Incredibly, that figure was only fourth largest in the eurozone.)

That shortfall contributed to a total debt that is, by one estimate, a stunning 350 percent of GDP. Foreign indebtedness exceeds 200 percent of GDP. The government has pledged to cut the budget deficit to 4.6 percent of GDP this year, to 3 percent in 2012 and 2 percent in 2013. To do that, the government proposed tough austerity measures that would cut spending, raise taxes on incomes and pensions and up the value-added tax.