It seems to me that the European debt problem can be best understood from the standpoint of the Red Queen hypothesis. This evolutionary hypothesis states that continuing adaptation is needed in order for a species to maintain its relative fitness among the systems that it is evolving with. The Red Queen hypothesis comes from the line in Lewis Carroll’s book, Through the Looking Glass, "It takes all the running you can do, to keep in the same place."
It seems to me that Greece, Ireland, and now Portugal, are running and going nowhere fast. These countries must evolve relative to their European counterparts or else they will reach a point where their economic, political, and social systems will breakdown. In my opinion, the European debt problem is evolving to outright defaults and bigger problems.