Of Europe's basket case financial economies (though we'll point out that the U.S. could soon fall into the basket case category as well), Greece still sticks out like a sore thumb.

Just look at this comparison of each PIIGS nations' twin deficits:

Or CDS spreads:

While it is pretty well known by now that Greece is in definite trouble, Europe's other teetering economies could easily fall like dominoes if a Greek crisis is mishandled according to Goldman.

Goldman: The twin deficits provide some guidance to the relative vulnerabilities (Chart 1), and in terms of comparisons of public-sector debt sustainability, these other countries all require medium-term primary surpluses that are only a fraction of Greece’s to stabilize their debt ratios for the same growth rate and real interest rate. That said, the entire Euro-zone periphery faces large financing needs and, to contain the cost of this financing, governments have started to outline fiscal measures to be implemented this year. Table 1 summarizes the key macro financial indicators for the Euro-zone periphery.

Contagion across Southern Europe will be a function of the policy reaction in Greece, the timing and extent of non-commercial financial support (if it turns out to be necessary), ECB policies and policy actions in the individual countries.

So focus on Greece, and hope the Eurozone gets it right. Because the stakes are huge:

If contagion from Greece engulfs other countries, then up to 20%-30% of Euro-zone GDP could be under severe stress. Were a major financial instability event to develop, we would expect the ECB to pause in its exit strategy, and then, if needed, reverse course and reinstate longer-term financing.

(Via Goldman Sachs, The Euro-zone Challenge: Greece and Contagion, Erik F. Nielsen, 4 February 2010)