This is the way the World ends,
not with a whim
but a banker .......................The Vast Waistband (or something).
The rumblings from the Euro zone grow louder [Worse than a crime]. The story is familiar. Banks borrowed a lot of money from each other, from ordinary rich people, and others, and lent it out to a bunch of yet others (including again each other) who can't afford to pay.
Because banks and bankers have a lot of (other people's) money they find it easy to make friends with politicians. This kind of warm personal friendship tends to pay off when the proverbial s*** hits the fan, as politicians discover an urgent economic necessity to save bankers asse[t]s. Thus, in Ireland, the government decided to put the whole nation on the hook for the unwise investment choices of Irish banks. The problem is that Ireland has the total population of a medium large American city and no particular national resources or other wealth, so they really can't afford that. Diverting such a large part of the national income sucks the economy dry, destroying jobs, income, and future prospects for growth.
Big Europe has extended Ireland a bailout of sorts, but it's a kind of limited, modified bailout - it just loans money to Ireland at lower rates than they could get on private markets. Of course the reason the private markets won't lend Ireland money at low rates is because they have a well founded fear that Ireland won't be able to pay ...
Ireland's problem has become Europe's because (a) there are a bunch of other countries in similar fixes, (b) Ireland and the others owe money to the richer European countries, and (c) although Germany is better off than almost any other Euro zone country, its own banks are weak, are owed a lot of money by the weak countries, and might just collapse too.
A lot of Europe's problems stem from the adoption of the Euro as a currency without adoption of the kind of unified governmental structures needed to support it. These problems were predictable and were predicted by the usual Cassandras (yes, including Krugman).