Last month, we saw the scary footage of the riots in Greece. The world was asking the question whether this was a sign of things to come.
Now EU Commission President Jose Manuel Barroso is warning that democracy could collapse in Greece, Spain and Portugal. The three of them are close to imploding now. More to the point, they only became democracies in the 1970s.
All this coincides with Spain now talking to the International Monetary Fund but denying it plans to ask for a bailout. Yeah right, if Spain is ok why are they meeting with the IMF? Just a social chat? And meanwhile, European policy makers furiously denying that a bailout is imminent. Which only confirms a Spanish bailout looks likely, particularly with the New York Times DealBook reporting that Spanish are now struggling to raise money in world markets.
Read between the lines: no one trusts them anymore. No country can function if its banks run out of money. If Spanish banks can't get money, their raw material for business, that makes a bailout more likely.
The world should be bracing itself for the next stage of the financial crisis. It might have a seismic political impact.
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