Investors increasingly expect Greece will not pull itself out of its financial hole and will have to renege on some debt payments, despite spending a year on bailout loans making painful austerity reforms.

The concern that bailouts and austerity, once Europe's hailed recipe for the crisis, are insufficient and that debt jitters are particularly difficult to control once unleashed has resonated globally. Even the U.S., whose debt investors have huge faith in, was warned by a ratings agency this week about its heavy borrowings.