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The road map the global financial crisis is following and the International Monetary Fund's ability to deal with it bear closer examination.

The International Monetary Fund (IMF), World Bank and European Union announced a combined $25.5 billion bailout plan for the former Soviet satellite state — and now EU member — Hungary on Oct. 29. The sheer size of the project warrants not simply a closer look at the crisis as it builds in Europe, but at the rough road map that is shaping up globally — along with the IMF’s ability to deal with it.

So far, the bulk of the serious damage from the crisis is confined to Europe, largely because it is in this region where the worst of the crisis has hit. Unlike the United States, which faces “only” a liquidity crisis, and Northeast Asia, which is anticipating “only” an export crunch, Europe faces simultaneously a liquidity crisis, an export crunch and a banking crisis. Additionally, states such as Iceland and Hungary were also deeply enmeshed in the yen and Swiss franc carry trade. The result is a perfect storm of factors that are making the weaker states in the vicinity of Europe the most threatened. The fact that Pakistan is among the first states in the IMF queue is testament to how weak Pakistan is, not to how exposed it is.

The Oct. 29 combined IMF/EU/World Bank package for Hungary is an attempt to nip the problem in the bud and build a firewall around the European Union’s most vulnerable economy. In this we anticipate failure, not because the plan is a bad one, but because the other problems at hand are simply too severe and embedded for one package — no matter how large — in one country to fix. Before this is all over, we would be very surprised if Estonia, Latvia, Lithuania, Croatia, Serbia, Romania and Bulgaria were not all forced to turn to the IMF directly. It is even possible, albeit less likely, that Austria, Sweden, Italy and Greece will require assistance.