Where's the next Dubai?

Dubai's not the only place with a looming debt problem.

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NEW YORK (Fortune) -- Dubai's not the only onetime highflier that risks drowning in debt.

The Middle East city-state's investment arm, Dubai World, is working with creditors to restructure $26 billion of debt it took on in a multiyear, global property binge.

Last week, markets briefly panicked after the firm signaled that it couldn't make its debt payments and the Dubai government said that it wouldn't step in.

While Dubai's problems appear for now to be under control, there is no shortage of other nations suffering a combination of plunging income and outsize borrowings that could soon demand attention.

Greece is running a budget deficit expected to exceed 12% of gross domestic product this year. Another country on the bubble is Romania, which is holding a presidential runoff election Saturday whose outcome is key to securing additional aid from lenders led by the International Monetary Fund.

So far, aid agencies like the IMF and the European Union have provided emergency funding to limit the depth of the economic downturns in troubled nations such as Hungary, Ukraine and Latvia. The IMF said in September it has made $163 billion of lending commitments since the collapse of Lehman Brothers.

But with economies everywhere under duress and investors fearful about the risks being assumed by free-spending governments, it is only a matter of time until the next chapter in the global debt crisis unfolds.

"The question that's being tested around the world is, what is the limit to the support that has been offered to these stressed countries?" said Mary Stokes, an economist who watches developing Europe for RGE Monitor, the analysis Web site run by New York University economist Nouriel Roubini.

Greece is one of those at risk of failing that test. The southern European state, with a long history of loose finances, is coming under attack in the credit markets for its excessive spending.

The Greek government's cost of borrowing money has surged following a rating agency downgrade early in 2009. The cost of insuring its government bonds against default has soared tenfold since the financial crisis started brewing in 2007.

Greek voters responded by toppling the government and putting in place an administration that proposed cutting the budget deficit by a quarter next year. Still, even the improved budget projects a budget deficit equal to more than 9% of GDP - triple the oft-ignored European Union limit.

Some observers say that Greece may have no choice but to go hat in hand to the EU, which has already provided ample support to Greek banks via cheap loans. But the finance minister of the newly elected socialist government, George Papaconstantinou, insists no request for a bailout is on the way.

Papaconstantinou pleaded instead in an op-ed piece Monday in the Wall Street Journal that "what Greece needs from its partners is, in effect, a 'suspension of disbelief.' "

If Greece is the most humid debt hot spot after Dubai right now, others aren't far behind. The export-dependent states of Latvia and Ukraine continue to struggle even with IMF support. And though the bigger economies of Spain and Ireland are much better diversified, they too are struggling to contain the damage of massive housing bubbles earlier this decade.

Even the biggest, most creditworthy borrowers aren't beyond reproach following a year of record stimulus spending. Credit Derivatives Research's government risk index has jumped almost 50% off its mid-September low, amid rising concern about fiscal imbalances in Japan, the United States and the U.K.

Yet the budget problem in the U.S. hardly counts as a crisis in itself. Federal debt held by the public is expected to soar to 60% of GDP at the end of fiscal 2010 from 41% at the end of last year, but that's well below the triple digit readings being taken in some of the distressed nations and in Japan.

The bigger potential problem for the United States is the cost of servicing all that debt over coming years, and whether all that spending might dampen economic growth.

Federal interest payments already amount to 1% of GDP, according to the Congressional Budget Office, and could hit 2.5% of GDP by 2020 unless lawmakers make changes.

In any case, the lesson many people are taking out of the Dubai episode is that with asset values having fallen and debt levels still high, we can expect to see more unhappy surprises in coming months.

"Dubai was very likely NOT the last in the series of post-credit-bubble aftershocks," Gluskin Sheff economist David Rosenberg wrote in a note to clients.