Predicting an imminent Eurocalypse risks making Harold Campings of many pundits, but with the stresses within the Eurozone growing now, it seems, by the minute, this piece from the Daily Telegraph is well worth reading, if only as warning. It’s written on the basis that Greece defaults, and includes the following predictions:

Every bank in Greece will instantly go insolvent.
The Greek government will nationalise every bank in Greece. The Greek government will forbid withdrawals from Greek banks. To prevent Greek depositors from rioting on the streets, Argentina-2002-style (when the Argentinian president had to flee by helicopter from the roof of the presidential palace to evade a mob of such depositors), the Greek government will declare a curfew, perhaps even general martial law. Greece will redenominate all its debts into “New Drachmas” or whatever it calls the new currency (this is a classic ploy of countries defaulting) The New Drachma will devalue by some 30-70 per cent (probably around 50 per cent, though perhaps more), effectively defaulting 0n 50 per cent or more of all Greek euro-denominated debts. The Irish will, within a few days, walk away from the debts of its banking system. The Portuguese government will wait to see whether there is chaos in Greece before deciding whether to default in turn. A number of French and German banks will make sufficient losses that they no longer meet regulatory capital adequacy requirements.

And, yes, there’s more. Read the whole thing.

If nothing else, the Telegraph piece gives a good idea of how high the stakes have become. At the same time, while I would agree that Greece is going to default one way or another, it is still too soon to rule out a ‘soft’ default (extension of loan maturities, for example) bolstered by a fresh bailout. That may buy some more time, time that many European banks would do well to spend bolstering their capital reserves. Meanwhile, the politics gets ever trickier both within the PIIGS and the countries that would be expected to bail them out. The weekend’s local elections in Bremen were a further blow to Angela Merkel’s efforts to keep the bailout show on the road, and the storm clouds appear to be gathering in the Netherlands, too.