With two regimes fallen, three more teetering on the edge and heightened tensions across the region, there is plenty to worry about in the Middle East.

But as Nomura points out in a new note, MENA countries, particularly in North Africa, need to keep their eyes on the ball in Europe, where a sovereign default could spiral into a real economic slowdown on the continent.

Europe is the source of more than 50 per cent of all visitors to Egypt, Tunisia and Morocco, and the destination for 30 per cent of Egyptian exports (the figure gets as high as 70 per cent for Tunisia:

MENA export exposure to Europe

MENA tourism exposure to Europe

Source: Nomura

And due to history and geography, European banks also play a strong role in MENA's banking sector, primarily through the reach of French banks. Combined with banks from what Nomura considers "periphery" EU countries (including Greece, Ireland, Italy, Portugal and Spain). The combination of France + periphery accounts for significant proportions of total foreign bank exposure in MENA countries:

MENA foreign bank exposure

The combination of sovereign defaults and restructurings could encourage European banks to pull back from exposure to MENA, Nomura worries. Uncertainty and political risk are particularly high in North Africa, and the Arab Spring, transition regimes and the downfall of previously powerful business and political figures could mean a decline in asset quality for banks.

It's worth noting that similar concerns about a mass withdrawal of risk-averse EU banks from emerging Europe led to the so-called Vienna Initiative, driven by the IMF, to avoid a financial crisis in countries seeing an exodus of European capital. In the wake of a new European crisis, it will be worth looking to see if MENA is considered worthy of a similar bank co-ordination drive.

See also:
How a Greek default would affect EM equities - FT Tilt
Hostage to Eurozone fortune, African stocks edition - FT Tilt
How the Greeks can hurt the Latins - FT Tilt
How Asian currencies could be hit by Greece jitters - FT Tilt