Former Italian Prime Minister Silvio Berlusconi's political party, Il Popolo della Libertà, said that should their leader be ousted from parliament, they would seek to oust the government from power. Berlusconi, one of the world's richest men, was convicted of tax evasion last year. He is scheduled to serve a one-year conviction which could potentially bar him from political office. And that's something his party won't stand for, causing them to threaten to bring down the government. In turn, that brought down the Italian stock market by 1.6%.
Italy, a country with €2.1 trillion debt, is the third-most indebted nation on earth behind the US and Japan. Italy's debt is nearly 130% of its entire GDP and the current government's instability won't help matters.
(Read more: Italian bonds underperform euro zonepeers as showdown looms over Berlusconi)
Meanwhile across the Ionian Sea, Greece's Finance Minister Yannis Stournaras told Greek newspaper Proto Thema that the country could need another bailout in 2014, but it would be the "small" amount of €10 billion. In 2010, Greece received €110 billion and in 2012, another €140 billion in bailouts from the International Monetary Fund and larger, more stable European countries, particularly Germany.
Spain, too, is feared to be close to a crisis point. Though its GDP contracted "only" 0.1% the in the last quarter compared with the previous year, prospects for future growth remains grim. Spain's unemployment rate is at 26%, a little less than Greece's 27%. But, Spain has more than four times Greece's population of 11 million.
(Read more: Merkel tries to reassure nervous Germanvoters over Greece)
So, isEurope about to flare up again? And, what will that mean for US markets?
Analyzing the fundamentals is Talking Numbers contributor Enis Taner, Global Macro Editor at RiskReversal.com. On the charts is CNBC contributor Abigail Doolittle, Technical Strategist at The Seaport Group. She examines the Dow Jones Industrial Average in light of the current situation in Europe.
To see Taner and Doolittle analyze the US markets given Europe's potential problems, watch the video above.
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