Government bond yields for Italy and Spain have shot up as investors are losing confidence in the quality of their debt.
Italy, Europe's third-largest economy, could be the next country unable to meet its debt obligations. And Spain, Europe's fourth-largest economy, also faces a budget crisis.
Greece, Ireland, and Portugal have already faced debt problems that led to protests in Greece as the government tried to cut its budget.
International lenders still have not yet confirmed terms for a Greek rescue package.
Italy was thought to have been able to weather its debt load because of its citizens high personal savings rate.
However, concerns rose last week after it was revealed Italian and Spanish banks might not be able to withstand an upcoming stress test.
Some analysts worry the crisis could spread through Europe as the European Union tries to bail out all of the countries facing debt problems.
If that happens, financial institutions worldwide could be affected. This could potentially freeze up lending and affect U.S. companies that do business internationally.