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Greece has made a deal to remain in the euro zone, but its massive challenges with heavy public debt, a fragile banking system and painful fiscal and economic adjustment have not gone away. And Greece won't be the last hard case. Other countries have unsustainable economic policies and heavy public debt, and are going to have to swallow some bitter medicine to stabilize their economy and rebuild creditworthiness.

Full-blown fiscal and economic crises are nothing new. There have been about 200 cases since the mid-1700s where a country's heavy public debt and financial sector troubles resulted in crisis (as described by economists Carmen Reinhart and Ken Rogoff in their acclaimed book This Time is Different: Eight Centuries of Financial Folly). While specific circumstances differ, most cases resulted in payment default, financial sector bailouts, hard economic policy adjustment and debt writedowns. Private investors and taxpayers eventually foot much of the bill in both the debtor country and among creditors.

So, who's the next Greece? In the euro zone, Cyprus, Portugal, Spain and Italy are all potential candidates. Italy would be the most difficult case if it stumbles, both domestically and for international markets. Its significant economic size, decades of resisting fundamental policy reform, and large stock of public debt – now exceeding 115 per cent of GDP – would cause major headaches in Europe and beyond.

That said, we believe the risk of debt contagion within the euro zone has actually decreased, at least for now. The Greek financial carnage has been a wake-up call for these countries about the perils of not engaging with euro-zone partners to find an orderly, workable solution. Walking away from debt obligations might look superficially attractive, but the Greek experience has revealed the high economic cost of financial chaos.

Looking beyond Europe, Japan is a leading candidate for ongoing public debt troubles. For more than two decades, Japan has added to its public debt by trying unsuccessfully to use fiscal stimulus to kick-start its moribund economy. Its gross public debt has grown to nearly 240 per cent of GDP – a third higher than that of Greece. Interest payments on this debt mountain represent nearly 25 per cent of the annual national budget, or more than what the Japanese government spends each year on health care or pensions. (By way of comparison, Ottawa spends $27-billion annually on debt service, or about 10 per cent of the federal budget.)

Japan's public debt mountain has been financed largely in yen by domestic creditors. It's a made-in-Japan problem – Japanese citizens take money out of one pocket to buy bonds, and put interest back into the other pocket. But in so doing, the country has created a huge fiscal liability and debt burden on future taxpayers, with negligible current economic benefit. Japan will most likely keep making debt payments to its citizens and not turn into a crisis country, but decades of bad fiscal policy have imposed huge opportunity costs on Japanese society.

Then there are the usual suspects: developing countries, particularly in Latin America and Africa, that have a poor track record when it comes to economic and fiscal management. Argentina, for example, is a chronic trouble-spot, but we've placed Venezuela at the top of the list as it slowly implodes. The populist Chavez government was unable to balance its budget even with oil prices above $100 (U.S.) a barrel. Sharply lower oil prices have revealed all the flaws of Venezuela's heavily interventionist economic policies, leaving empty shelves and growing misery for poor and rich alike. Venezuela's external debt of around $95-billion is only 25 per cent of GDP, but its payment capacity is collapsing: output fell by 2 per cent in 2014 and is projected by the IMF to contract by 7 per cent in 2015, with inflation surging into the triple-digits. Venezuela is a likely next-case for financial (and political) meltdown.

Even closer to home, Puerto Rico has recently begun to default on its debt service payments. A territory of the United States, Puerto Rico has built a public debt burden of $72-billion or 70 per cent of GDP. Despite a decade of moribund economic growth, Puerto Rico failed to implement a corresponding pullback in government spending and instead kept raising financing with tax-free bonds. Since Puerto Rico uses the greenback, it cannot depreciate its currency to help rebuild its competitiveness. It now has little choice but to work with its creditors – and beg for assistance from the U.S. Congress – to develop a workable debt management strategy and to try to stabilize its economy.

In short, the risk of debt contagion from Greece to other heavily indebted euro-zone countries has likely been overstated. But there are plenty of other countries out there that are candidates for a financial crisis, proving that financial folly is still very much in vogue.

Glen Hodgson is senior vice-president and chief economist at the Conference Board of Canada.