Debt fault lines continue to spread and grow in Europe. Although most of the focus continues to be on Greece even after the second bailout was completed, there are many other nations in Europe that are facing a debt crisis of their own.
Greece, Portugal, Spain, Ireland, and Italy are already quite deep into Primary wave  down in terms of social mood. In Greece, Primary wave  down has been unfolding for over a year, and yet, it is still in its early stages as optimism about future economic prospects are still present. In the coming months and years, "too big to fail" is going to be replaced by "too big to bail out" as larger nations start to fold under the increasing weight of their debt burdens.
Recently, Spain and Italy are under increased financial stress from their debt crisis and will need a bailout in the near future. Analysts are now warning that Italy is following the same path as Greece. There are already fault lines taking hold in the UK as well, and protests erupted last month when the government attempted to implement austerity measures which made changes to pensions and raised the retirement age. The magnitude of the labor and work strikes that unfolded in the UK last month is indicative of the degree of the bear market, considering that we are still in the early stage of the bear market.
As I indicated 2 months ago, bailing out a small nation isn't much of a deal, but bailing out a large nation is far more difficult, if not impossible. Spain, Italy, and UK are all too big to bail out, which is why a default in Europe, followed by debt contagion, is inevitable. The most likely scenario is for the UK to default on its debt, most likely in the next several months, creating a global ripple effect. The chain reaction would commence and within the next six months, Greece, Spain, Portugal, Ireland, and Italy would all default on their debts. A debt default by Italy would also create a global ripple effect.
The fault lines are on the verge of going critical, and some economists are starting to recognize the implications. A cascade of debt defaults in Europe would indeed be a defining characteristic of the first half of Primary wave  down (2011 - 2013) in the DJIA, the FTSE 100, the DAX, and the CAC 40. A cascade of debt defaults in Europe could possibly result in the breakup of the European Union either in October 2013 (the center of Primary wave  down) or 2019 (the center of Primary wave  down), and the abolishment of the euro.