BOSTON — Harvard professor Niall Ferguson said a terrifying thing Friday in an interview with Bloomberg TV.
"If there's going to be a Lehman moment in the crisis it's going to be next week. This is the financial equivalent of the Cuban Missile Crisis. And the missile is really a bank run, which ultimately even the Germans can't be completely immune to," Ferguson said.
The Harvard historian was referring to Sunday's election in Greece, which could dictate 1) the future of the euro zone, 2) the very idea of European unity, 3) the health of the $17 trillion EU economy, and 4) the stability of the world's economy, including the global financial system.
That's because the outcome of the political struggle between the conservative New Democracy party and the leftist Syriza coalition will likely determine whether Greece accepts the budget-cutting medicine the European Union and International Monetary Fund bailout requires.
If voters reject that austerity prescription, it could eventually drive Greece from the euro zone, put additional pressure on Spain, Italy and others in the reeling bloc, and trigger panic on global financial markets, where talk of bank runs and credit crunches is never a good thing (see the Lehman reference above).
As the BBC's Gavin Hewitt points out, Sunday's moment of truth boils down to two key questions:
"Will Greece gamble that Europe will agree to easier terms on its bailout, or will it go along with a rescue package that brings with it years of painful austerity? Secondly, will Germany under relentless pressure accept it will have to pay more to ensure the euro's survival."
So let's assess the situation:
We've got loads of unhappy Greeks exercising their volatile and unstable political system.
We've got a giant game of chicken between Athens and Brussels (and Berlin) over who will pay how much, and to whom.
We've got millions of people across Europe struggling with debt and the economic pain of austerity measures designed to reduce that debt.
And we've got a global economy that's weakening in nearly all key growth areas, from Europe, to the US, to China.
Funny how democracy works, even in the birthplace of the thing — and in a country that makes up just 2 percent of the euro zone's entire economic output.
But fear not.
GlobalPost has you covered.
From our scrappy team of correspondents around Europe we've prepared this reading list on how debt, the euro crisis and the politics of austerity is affecting just about everything across that unhappy continent — from elections to hip-hop.
And, yes, it's a mess out there:
For a great explanation of the political factors and factions at work in Athens this weekend, see Siobhan Dowling's piece that lays out the stark choice facing Greek voters.
For a smart look at how we got here, and how Greece's profligate ways are being discussed privately by Greeks, see James H. Barron's commentary from Athens.
For background on how Spain's EU bailout is provoking envy among Greek political leaders, see Paul Ames' analysis from Brussels.
For more insight on Spain's pain, see Paul's explanation of what's really troubling the Spanish economy.
For the changing political headwinds in France see Barry Neild's profile of Marechal-Le Pen, the new face of the country's far-right.
For a look at how the euro virus is finally spreading to Europe's economic powerhouse Germany, see Siobhan Dowling's analysis from Berlin on what that could mean.
For a counter-intuitive approach on austerity see Paul Ames's provocative examination of how Estonia's economy is faring these days — quite nicely, thank you very much. This GlobalPost story also triggered an amusing Twitter fight between the president of Estonia and Nobel Prize-winning economist Paul Krugman.
And, finally, you'd expect Europe's widespread economic pain to produce some great protest art.
Well, it has.
Here's Barry Neild's profile of London rapper Plan B, the angry hip-hop voice of the UK's austerity generation.
Because if we're all going down this weekend thanks to Greece and the rest of Europe, we might as well do it to a killer backbeat.