The government-debt crunch rattled Europe's financial system and weighed on the global economy. Portugal became the third European country, after Greece and Ireland the year before, to require a bailout as its borrowing costs soared. And investors grew worried that countries with much larger debts, such as Spain and Italy, would also need help.

In Greece and Spain, incumbent governments fell and beleaguered prime ministers departed. The threat of fiscal contagion from Greece spreading elsewhere pushed Italy the euro zone's third biggest economy to the brink and forced the departure of controversial Prime Minister Silvio Berlusconi. The crisis has strained the very fabric of the EU and threatened the dissolution of the common euro currency.