(Article on the prospects of a second double-dip global economic collapse updated with additional analyst commentary on the outlook for the euro and other indicators of global economic weakness.)

NEW YORK (

TheStreet

) -- Just when we thought we were headed out of the recessionary woods, the international markets seem determined to drive equity investors back into shadows befitting the largest trees from China and Europe.

In the case of Europe, it might be more apt to describe the rising fears as being the height of Mount Olympus, while in China, the fears are less about felling trees than a coming devastation in China's property market equal to the environmental devastation wreaked in the building of the Three Gorges Dam.

Last Friday, when the Federal Reserve signaled its first significant step in the increasing of unprecedentedly low interest rates, fears of the euro's decline versus the dollar came into sharp relief. The euro is already down 5% against the dollar this year, and on Monday morning analysts were showing more bearish attitudes about the trend for the euro, with several analysts cutting their 12-month euro estimates. The euro is down 6.1% since Jan. 14.

The euro slide was just the latest uncertainty about the European economy, though. The past several weeks of global market uncertainty have prominently featured the Greek budget tragedy, and there has been a mounting investor version of the Greek chorus crying out that the European Union's budgetary shortfalls could spell recessionary double dip for the global markets.

Greece may only represent 2.5% of the European Union's gross domestic product, but Italy, Portugal, Spain and Ireland are seen as next in line behind Greece as limbs of the EU standing on shaky economic versions of the Achilles Heel. Last Friday, the euro hit its lowest price since May. Italy has the second-largest debt plate in the region.

Greece had a budget shortfall of 12.7% last year, more than four times the limit allowed for euro countries, and the highest debt level among all 27-nation European Union members.

Greek and European finance ministers assured investors last week that the plan to fix Greece's deficit problems is moving ahead, but rating agencies are awaiting proof.

The EU's accounting watchdog last week demanded that Greece divulge information on the swaps agreements it has in place with banks -- press reports indicate that there may be as many as 15 banks involved in derivatives deals with Greece that have helped the nation to hide its level of debt behind the securities world equivalent of smoke and mirrors.

What's more, economic data from Europe also showed that the continent's economic recovery had more or less stalled. Gross-domestic product in the 16-nation euro region increased 0.1% in the fourth quarter, one third the rate economists had forecast in a

Bloomberg

survey.

Greece's woes and the European Union's inability, at least so far, to put out the debt fire, has stoked fears that the European Union could even break apart. Greek government bonds fell again last week amidst the fears that its deficit-busting measures will be insufficient, and that the European Union response still lacks clarity.

Of course, it wasn't too long ago that the Dubai debt debacle spent a few days in the spotlight as the next big trigger for a renewed global crisis. But let's face facts: China and Europe are a lot more important than Dubai as far as a global recovery, even if they can't lay claim to the world's tallest building.

In the case of China, it's not a deficit like in the European Union that has provoked market jitters in recent weeks, but China's announcement during the second week of February that its banks would be required to boost reserve levels, the second time in a month that China mandated that its banks increase deposits.

It is not overstating matters to say that the global economic recovery is pinned to the wings of China's dragon. Now, there seems a heightened degree of tension now between China's efforts to aggressively slow the frothier edges of its economy -- fears of domestic bubbles in China, particularly in real estate, are real -- versus China's need to manage its domestic front.

Marc Faber, publisher of the

Gloom, Boom & Doom Report

told

Bloomberg

recently that the Chinese economy will decelerate very substantially in 2010, if not crash outright.

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Hedge fund manager James Chanos has been saying for weeks already that China is in a real-estate bubble. Chanos, founder of New York-based

Kynikos Associates

, rates China as "Dubai times 100 or 1,000."

Notably, the urban area of Huaxi in China is now planning to build what would be the second-tallest building after Dubai's Burj Khalifa, on top of already being in construction of one of the world's 30-tallest buildings, called the New Village in the Sky. There are growing fears that that the New Village in the Sky may evoke the proverbial sky falling on China more than its ambitious growth profile.

Or are the fears of a China slowdown just Chicken Little saying the sky is falling?China was still the world's fastest growing economy in the fourth quarter, with a 10.7% growth rate. George Soros doesn't think the fears are overdone, and recently remarked that the Chinese economy is overheated.

Will Chanos be to China's real estate bubble what John Paulson was to the U.S., calling his bubble shot and, unfortunately for the rest of us, being proven right? China could be the commercial real estate equivalent of the U.S. residential housing disaster.

There was $1.4 trillion in new loans in China last year, according to a recent

BusinessWeek

article, a big part of which went to build skyscrapers. Beijing's office vacancy rate was more than 22% in the third quarter of last year, near the top of the global office vacancy list, and some local real estate executives are saying that vacancy rate is now closer to 50%. Even the 22% vacancy rate represented more office space than in Germany's top five office markets.

What's more,

Bloomberg

reports that the Chinese banks already doled out one-fifth of their entire planned lending budget for 2010 in January alone Chinese banks had already lent a record amount in 2009.

Foreign investment in China was up 8% in January too, and as any investor should know, the biggest rush into a market often chases performance.

At the same time that Europe and China are provoking the markets into renewed recessionary fears, even with all the progress that has been made in the U.S, the employment situation in the U.S. is far from certain, and Congress is doing its part on its usual fits and starts with jobs legislation.

And thus, we ask the sane and well-reasoned readers of

TheStreet

: who will be responsible for the global economic recessionary double dip if it is going to happen?

-- Reported by Eric Rosenbaum in New York.

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