The term “contagion” has been thrown around a lot lately in many of the news stories depicting the various financial crises around the globe. Greece, in particular, has been described as the most currently “contagious” economy and the great fear is just how far its financial “disease” will spread.

This health-and-sickness analogy is, in a certain sense, an odd way to explain the financial woes that many nations, banks, insurance agencies and other major companies are facing today. It tends to personify what are, strictly speaking, economic entities. And while there is an obvious difference between a living, breathing organism and the financial structure of a corporate organization, the “contagion” analogy is nonetheless apt. It is, in fact, quite useful in understanding why recent developments in Greece can have a rapid and noticeable impact well beyond its borders, in places as far away as Jasper.

Just like the advent of global air travel led to more sudden and widespread transmissions of disease, the advent of economic globalization has increased the scale and speed with which a relatively localized condition can make its way across the world.

The world collectively held its breath (behind surgical masks, in many individuals’ cases) when diseases like SARS and the swine flu were in their initial stages of outbreak. And while these events ultimately turned out to be relatively mild compared to some of the initial predictions, the early fears were quite justified. There was a real potential for the spread of the contagion to spiral out of control and turn into a global catastrophe, largely as a result of international air travel.

In an analogous way, the burdensome debt Greece is currently carrying is not simply a local problem. That’s because its lenders, located largely outside Greek borders, are also in financially precarious positions, especially in the event of what looks like an increasingly inevitable Greek default. This, in disease terms, could just be the beginning of the outbreak.

The very real potential is that the failure of Greece could lead to the failure of major banks across Europe. This is where it gets complex. Exactly how many banks are at risk and to what degree is not certain. The ability and willingness for Euro-zone countries, most of which are also heavily in debt themselves, to backstop these banks is also in question. The results could range from bad – a further economic slowdown as credit markets tighten up – to worse – an all-out run on many banks and a meltdown in the entire European lending system.

And that’s still not all. The heavy debt burdens in economically anemic countries like Italy, Spain and Ireland are also looming like a Sword of Damocles over the entire situation. And with Greece’s recent decision to hold a referendum on the European Union’s bailout package and the further austerity measures that would come along with it, the fibres holding the sword up are looking increasingly frayed.

The effects were immediately felt on this side of the Atlantic with the mere announcement of the Greek referendum on Monday. If you checked the value of your retirement portfolio on Tuesday morning, you can almost certainly attest to that. But short-term fluctuations in the stock market and the threat of financial gridlock aside, you don’t have to look far to see how the situation in Europe can quickly spread here.

On a national scale, the European Union is Canada’s second-largest trading partner after the United States, making up 11 per cent of our export-dependent economy’s external trade. On a local scale, Europeans comprise a significant portion of the visitors to Jasper and its tourism-dependent economy every year. If a recession hits Europe, which now looks all but certain, businesses in town will definitely feel the pinch next summer.

Such is the nature, though, of the global economy. Just like when SARS or the swine flu hit, we’re all in this together. And if we don’t collectively get things under control, the consequences will know no borders.