For nearly two years, the Greek debt crisis has been causing financial and political turmoil in Europe.

Now, the widening European troubles are undermining U.S. stock prices and increasing the odds of a global recession.

The crushing debt loads incurred by Greece, as well as Italy, Ireland and others, have "badly rattled global financial markets," Nariman Behravesh, chief economist for IHS Global Insight, a forecasting firm, said Wednesday.

That has helped push the United States "very, very close" to the edge of a recession, he said during a teleconference on the crisis.

Europe In Your Medicine Cabinet

If you reach for Bayer aspirin to ease a headache from worrying about your job prospects or retirement savings, you'll also gain some insight into the problem.

Bayer is a German company. If you want Valium, it's made by Roche, a Swiss company.

European brands are so much a part of American life that it can be hard to tell our economies apart. Americans drive Volkswagens (German) to the Shell (Dutch) station, and grab a Nestle (Swiss) Crunch bar at the counter. They call home on Nokia phones (Finnish) and enliven parties with Jameson Irish Whiskey.

U.S. tourists can fly to Europe on Air France using an HSBC (British) credit card, and the miles will count toward rewards from Delta. Once on the ground in Paris, weary travelers can revive themselves with McDonald's cheeseburgers and Starbucks coffee.

Big Trading Partners

The corporate overlap is so great that the European Union is the United States' largest trading partner, with approximately $560 billion in total trade each year. Trade with China totals about $457 billion.

"Slow growth in Europe already is having an impact on U.S. companies," said Matthew Slaughter, a professor at the Tuck School of Business at Dartmouth. U.S. companies will need fewer workers and earn lower profits as business slows in Europe, he said.

"We sell Europeans a lot of agricultural products, manufactured goods, financial services — a pretty broad spectrum of things," Slaughter said.

Given our countless economic ties, Europe's public debt troubles are ours, too. Unfortunately, "the sovereign debt problems in Europe are more complicated and intractable" than even those in this country because of the structure of the European Union, Behravesh said.

Europe's Evolving Unification

The problems have been decades in the making:

-- At the end of World War II, most Europeans were tired of slaughtering each other. A few political visionaries hoped to permanently end the bloodshed by lashing together the economies of Europe's feuding neighbors, particularly France and Germany.

-- In 1951, France, Germany, Italy, Belgium, the Netherlands and Luxembourg created an agreement to begin integrating the coal and steel sectors of their economies. The agreement helped economic growth and fostered cooperation among former enemies.

-- Over ensuing decades, more countries joined and the economic and political integration became more elaborate. Today, 27 countries belong to the European Union, while five more are candidates to join. A smattering of countries, notably Norway and Switzerland, are not members.

-- In 1999, the core EU countries created a common currency, the euro, which is used by about 327 million Europeans. Some member nations, including the United Kingdom and Sweden, continue to use their own currencies, i.e., the British pound and Swedish krona, respectively.

Although 17 EU countries use the euro, no one legislative body, such as the U.S. Congress, sets a single fiscal policy for all members.

The Wealth Divide

In addition to its monetary, fiscal and political complications, Europe has huge divisions in terms of wealth. Some countries are quite affluent, such as Austria, Belgium, Denmark, Germany, Luxembourg, the Netherlands, Finland, Norway and Sweden. Others are poor, such as Bulgaria, Latvia, Macedonia and Romania.

Others were more prosperous in recent years, but now are staggered by both public and private debt. Those include Portugal, Italy, Ireland, Greece and Spain. That's a problem for all Europeans because banks throughout the region hold the notes. If some countries default, all countries may feel the repercussions at their banks, Slaughter said.

"The big concern is the potential global financial crisis," he said. "A lot of U.S. banks have substantial operations in Europe. The concern is that if there were a run on European banks, it would put pressure on American banks."

Besides this sovereign debt threat, Europe has other serious problems, including an aging population, high unemployment and heightened social and political unrest over government austerity efforts.

Weaknesses And Strengths

Collectively, Europe's prospects for growth are not good. Economists are forecasting less than 2 percent growth for this year, and perhaps 1 percent next year. The very slack pace largely reflects Germany's slowdown and France's stagnation.

Despite the gloomy outlook, Europe has strengths to help it bounce back. Its large population is relatively healthy and well-educated. Its financial systems are sophisticated, and much of its infrastructure is world class.

The question being asked on both sides of the Atlantic is whether the wealthier EU members can find a politically acceptable way to bail out the unstable ones.

Rebecca Patterson, chief market strategist at J.P. Morgan Asset Management, said she believes EU leaders "will be able to muddle through" the crisis and prevent debt defaults. But she said the outcome is far from certain. "Europe is one of the things that keep me up at night," she said.

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