Paris: Throughout Europe’s financial crisis, Italy and Belgium have managed to avoid being one of the countries that keep people awake at night.

However, even as concern mounts that Portugal and possibly Spain may seek financial aid after Greece and Ireland requested bailouts, investors have started asking whether those two economies may be the next weak links in Europe’s monetary union, the euro.

Italy and Belgium have a lot in common: Both are less dependent on foreign creditors than Greece or Ireland. Each is plagued by severe political dysfunction, though, which has raised questions about whether they can ever repay a mountain of debt, respectively the second and third-heaviest loads in the European monetary union after Greece.

Both countries have long histories of debt and political problems that contributed to economic downturns in the past, but no one seemed to pay attention during the current crisis until this week, when investors, transfixed by debt fears in other countries, drove borrowing costs in Italy and Belgium to near record highs.

Growing panic: Italy’s finance minister Giulio Tremonti cut government spending and overhauled the country’s expensive pensions system to reduce debt. Giuseppe Aresu / Bloomberg

While few currently think these two countries have a high risk of defaulting, the spotlight could turn back to Belgium and glare harshest on Italy, the third-largest euro zone economy after Germany and France, if neither can muster the political cohesion needed to assure financial markets that they can reduce their debt.

Italy has done a better job than Greece in keeping its fiscal house in order during the debt crisis. The Italian finance minister, Giulio Tremonti, prudently cut government spending and overhauled the country’s expensive pensions system with the blessing of Prime Minister Silvio Berlusconi’s government.

The nation’s current-account balance is modest, and it enjoys high household and corporate savings.

But Italy has traditionally depended on state borrowing, even as its efforts through the years to improve growth have stumbled. That raised new concerns after the global financial crisis hit industrial production, a pillar of the Italian economy, and employers failed to improve competitiveness by limiting wages or improving productivity.

Having joined the euro zone, Italy, like Belgium, is no longer free to devalue its currency to revive growth.

Panic about Belgium’s finances would seem illogical, since the country has the wherewithal to repay debt. It enjoys a close trade relationship with Germany, helping to fuel exports, and employment is rising.