As the chart demonstrates, there is a high degree of interconnectedness with sovereign debt. Rather than spread the risk between countries, these relationships magnify the risks and uncertainties.
These connections are some of the ones that Nassim Taleb warned us about. We should have a banking system and sovereign bond market that is robust. Instead we have a system so closely connected that when one Domino threatens to topple, sovereign intervention is "required" to prevent the next one from falling too. At some point, sovereign debt will be the next bubble to burst.