The European sovereign debt crisis is reaching a potential turning point as leaders meet to discuss how to stop the problems from spreading from Greece to other embattled markets such as Italy and Spain.

“As another D-day looms on Thursday, we have few soothing words,” Suki Mann, senior credit strategist at Societe Generale SA in London, wrote in a note to investors. “Greece appears beyond repair, Italy is on the brink and the chances are that the euro might be no more very soon.” [Euro ETFs in Focus Before EU Meeting]

“The correlation of Italy to Spain has picked up recently. There are also some emerging signs that France could be affected. We expect the crisis to continue deteriorating and threaten the entire euro area,” says Jacques Cailloux, an economist at Royal Bank of Scotland.

A program or plan that guarantees the debt of all European Union countries facing risk is simply not a possibility anymore. The addition of Spain and Italy to the possibility of default within the EU countries is a disaster, as these economies are simply too large to be bailed out. Spain is the fifth largest economy in the European Union, while Italy is third. [ETF Spotlight: iShares MSCI European Financial Sector]