THE NEW banana republics:

The same kind of macroeconomic irresponsibility that was typical of Latin America (including Brazil) in the second half of the last century is becoming a major characteristic of the following 20 countries: Iceland, Greece, Portugal, Spain, Latvia, Ireland, Ukraine, Romania, Lithuania, Turkey, Bulgaria, United States (yes, USA), Australia, Japan (yes, Japan), United Kingdom (yes, UK), South Africa, France (yes, France), Russia, New Zealand, and Italy.

They have either current account balance-of-payments deficits greater than 4% of GDP (Greece has 12%) or Government deficits greater than 4% of GDP (Spain has 12%) - or both (the so-called "twin deficits").

This explains basically why many of these countries are facing major increases in terms of country risk. In particular, Greece and Spain are major concerns now, as far as sovereign risk is concerned – and, additionally, Iceland, Portugal, Latvia, Lithuania.