NEW YORK (CNNMoney.com) -- Just when we all got used to referring to Europe's fiscal crisis with the tidy little acronym of the PIIGS, another European country is angling for admittance into the bad debt club.
Stocks tumbled Friday, and while a big reason for that was the disappointing jobs report, futures were already lower before the jobs numbers came out because of new concerns about Hungary.
According to several reports, a spokesman for the new prime minister of Hungary, a member of the European Union that does not use the euro currency, said that talk of a Hungarian default is not "an exaggeration"
Those comments caused Hungary's currency, the forint, to plunge and also led to another sell-off in the euro. The euro dipped below $1.20 against the dollar, another 4-year low and an important technical milestone on what some experts think is a road to eventual dollar parity.
"The euro has been moving lower and it will continue doing so. The question now is the pace of the decline, not whether it will decline," said Vassili Serebriakov, currency strategist with Wells Fargo in New York.
So what do the latest Europe woes mean for the U.S. economy? It's not great news.
Preston Keat, director of research with political research and consulting firm Eurasia Group in London, wrote in a note Friday morning that Hungary is "not yet in a Greek situation" but it is "wobbly."
That hardly inspires confidence. So any hope that the debt crisis could be contained to the three most troubled of Southern Europe's PIIGS (Portugal, Spain and Greece -- Ireland and Italy are the other two) may have been dashed by the new fears about Hungary.
Maybe it's time for a new acronym? PIIHGS with a slient H for Hungary? That might even be too narrow. If Hungary is in trouble, it stands to reason that other emerging markets in Central and Eastern Europe may also succumb to debt problems.
"Hungary has looked like one of the weaker Eastern European nations for a while and that says a lot since that's an area that has been underperforming for some time," Serebriakov said.
If other Eastern European nations start to wobble, the "healthier" countries in Europe may not be able to stand idly by and watch the continent fall apart.
Dan Cook, senior market analyst with IG Markets in Chicago, said there are growing worries about how much exposure big European banks have to the debt of the most troubled European countries.
So as painful as it may be, the European Union, and likely the IMF as well, might have to step in to stabilize the euro and prevent the crisis from intensifying.
"The reality is that the stronger countries in the euro zone, including Germany, France and the Netherlands, are in much better shape," said John Stoltzfus, senior market strategist with Ticonderoga Securities, an institutional trading firm in New York.
"They are going to have to help their weaker brethren get through this. That means austerity programs, which will shave off growth in Europe's economy for several years," he added.
Julian Thompson, co-manager of the Threadneedle Emerging Markets fund in London, said that this may only be true to a point though. Political pressures could force Europe's more stable countries to only focus on the biggest problems in Europe.
"Hungary, to be honest, is a bit of a sideshow. Spain is more important. The Spanish property bubble hasn't been pricked yet and that's going to put more pressure on the euro for some time," said Thompson.
Regardless of what happens in Hungary though, one thing is clear: Europe is a mess. And continued weakness throughout Europe, at the very least, will make it tougher for the U.S. economy to recover.
It may not lead to a double-dip recession but a sluggish European economy is likely to lead to more woes for companies that do big business in Europe.
In addition to the currency hit that companies will take when they report earnings, the bigger concern is that a slowdown in consumer demand in Europe would mean a lower level of exports to Europe. And that's the last thing that the still-fragile U.S. economy needs.
Reader comment of the week. I wrote about Europe's woes earlier in the week as well. And while much of the focus has been on the precipitous plunge in the euro, one reader astutely pointed out that people need to put the euro's decline in historical context.
"I don't see why people are so alarmed by euro around $1.20, it's right in the middle of its usual historical range ($1.10-$1.30). If anything, the recent pullback is a return to normality assuming it stabilizes a bit. The spikes in the last three years are an anomaly," wrote Iikka Keränen.
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