AP Photo

A nother Great Depression may have been averted but the crisis is far from over. Credit is tight and contagion is spreading to all highly leveraged points in the global economy: mortgage-ridden households (Iceland, the US, the UK, Spain, Ireland, central and eastern Europe); banks (Iceland, the US, the EU, Russia and the former Soviet Union); quasi-sovereign debt (Ukraine’s Naftogaz, Dubai World); and now Greece and other weak links in the eurozone.

Greece has long been an accident waiting to happen due to heavy public debt and lack of competitiveness. But its...